Arizona Moves to Ban Crypto Taxes and Protect Blockchain Nodes

Arizona lawmakers propose bills to exempt virtual currency from state taxes, ban local taxes on blockchain nodes, and amend the constitution to clarify digital asset tax rules, aiming to boost crypto innovation pending voter approval in 2026.

Arizona is considering significant changes to its approach to cryptocurrency and blockchain taxation through a series of legislative proposals. State Senator Wendy Rogers has introduced two bills and a resolution: SB 1044 would exempt virtual currency from state taxation, SB 1045 would prohibit local governments from taxing or fining entities running blockchain nodes, and SCR 1003 would amend the state constitution to exclude digital assets from property tax definitions. While the blockchain node bill could advance through the legislature, the tax exemption and constitutional amendment would require voter approval in the November 2026 general election. These measures aim to foster a more favorable environment for cryptocurrency adoption and blockchain innovation in Arizona by removing tax barriers and clarifying legal definitions. The proposals build on previous efforts to establish a digital asset reserve and expand the state's authority to invest in cryptocurrencies. Critics have raised questions about the potential impact on state revenue and the sustainability of such exemptions.