Arizona’s senate has passed legislation to accept cryptocurrencies for tax payments with 16 lawmakers voting in favor, 13 against, one abstaining.
“A taxpayer may pay their income tax liability using a payment gateway such as bitcoin, litecoin or any other cryptocurrency recognized by the department, using electronic peer to peer systems,” the bill says before further adding:
“The department shall convert cryptocurrency payments to United States dollars at the prevailing rate after receipt and shall credit the taxpayer’s account with the converted dollar amount actually received less any fees or costs incurred by the department for conversion.”
The bill now has to go through the final stage, requiring approval by the House before it becomes law. If approved, it would be the first such bill in the western world, with Arizona, in effect, declaring cryptos to be legal tender.
“It’s one of a litany of bills that we’re running that is sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for block chain and digital currency technology in the future,” Arizona State Rep. Jeff Weninger said.
Arizona has another bill in the process, which might over-rule IRS’s interpretation by declaring public blockchain assets to be a currency, not a commodity.
If successful, congress might hopefully push forward for the removal of double taxation on digital currencies all-together and might even follow Japan in declaring crypto as legal tender.
But at congress level there hasn’t been much movement even while states try to position themselves to take advantage of the latest innovation, blockchain tech.
Tennessee is one such state. Their lawmakers too are going through the process of enacting a crypto bill to give smart contracts and blockchain signatures the same legal standing as more traditional methods.
“Tennessee is ready for blockchain,” Rep. Pat Marsh of Arizona said at a hearing on the bill. “We are open for business,” he added.
Yet it might be Wyoming which could be breaking new grounds. They have have introduced a bill, backed by the Speaker of the House, to exempt “blockchain tokens” from “securities and money transmission laws.”
If it passes, that would be groundbreaking and it would give the remote state at least a footnote in the anatomy of blockchain history.
“Wyoming is stepping up to welcome the blockchain community with open arms,” Rep. Tyler Lindholm, a Republican member of the Wyoming House of Representatives, said before further adding:
“We view non-securities blockchain tokens as a new asset class that is neither money nor securities, and therefore believe existing money transmitter and securities regulations should not apply.”
Following explosive growth in the blockchain space, with the crypto market cap now near half a trillion, US states are vying for potentially billions in investment, creating competitive pressure.
That’s on top of global jurisdictional competition between nation states, with Britain seeing an opportunity in 2014 and Japan now seeing an opportunity to embrace the blockchain space.
This race might come to a head at the proposed crypto G20 summit when different interests play what could be the greatest strategic game of this century in deciding just how they position themselves.
For the very mobile and limited blockchain talent will certainly want to go only where they are welcomed, especially now that there are plenty waiting them with open arms.
Some nations thus, like France in particular, might be making the biggest blunder, while others might race ahead as we now stand at the verge of a new era.