Arizona state Senator Wendy Rogers has introduced two bills along with a resolution aimed at reforming the state’s tax laws concerning digital assets.

On Friday, legislation was prefiled in the Arizona Senate that seeks to exempt virtual currencies from taxation (SB 1044), restrict counties, cities, and towns from taxing or fine entities operating blockchain nodes (SB 1045), and amend the state constitution’s definition of property taxes to clarify the treatment of digital assets (SCR 1003).

While the blockchain node initiative might progress through the legislature, the crypto tax measure and resolution will need the approval of Arizona voters at the subsequent general election set for November 2026.

SCR 1003 aims to revise Arizona’s constitution specifically to exclude virtual currencies from property tax obligations, while SB 1044 aims to incorporate similar provisions into the state’s statutes. SB 1045 will prevent municipalities from imposing any taxes or fees on individuals running nodes on blockchain technology.

Bill barring cities or towns from taxing blockchain node activity: Source: Arizona legislature

Arizona stands as one of the few U.S. states with existing laws permitting the government to claim ownership of unclaimed digital assets after a three-year period. This law was part of a campaign by crypto advocates to set up a digital asset reserve in the state. However, there are other initiatives suggesting the state gain further authority to invest in cryptocurrencies such as Bitcoin.

Rogers previously co-sponsored a Bitcoin reserve bill which was vetoed by Arizona Governor Katie Hobbs in May. Following the veto, she expressed her intention to reintroduce the legislation in the next session, although requests for a comment have gone unanswered as of the article’s publication.

U.S. States Adopt Varying Approaches to Crypto Legislation

Arizona is part of a select group of U.S. states with laws creating digital asset reserves, along with New Hampshire and Texas. While some lawmakers in other states are working to gain support for similar legislation, many are advocating for alternative taxation strategies related to digital assets.

For instance, Ohio’s House of Representatives has passed a proposal aimed at exempting crypto transactions under $200 from state capital gains taxes, though progress has stalled since June.

In New York, Assemblymember Phil Steck has suggested implementing a 0.2% excise tax on transfers and sales of digital assets, which has also seen no movement since August.

At the federal level, Wyoming Senator Cynthia Lummis submitted a draft bill proposing a de minimis exemption for digital asset transactions with capital gains below $300. She announced her retirement from the Senate effective January 2027.