Arizona lawmakers are moving forward with a plan that could eliminate property taxes on cryptocurrencies like Bitcoin, Ethereum, and stablecoins, placing the final decision in the hands of voters this November.
Quick Summary – TLDR:
- Arizona Senate committee advances two crypto tax bills.
- Voter referendum proposed to constitutionally ban property tax on digital assets.
- Bitcoin, Ethereum, and stablecoins would be included under the exemption.
- Governor Hobbs’ prior vetoes highlight political divide on crypto regulation.
What Happened?
Arizona’s Senate Finance Committee narrowly approved Senate Bill 1044 and Senate Concurrent Resolution 1003, both designed to remove property taxes from digital currencies. These measures now head to the Senate Rules Committee and could lead to a constitutional amendment, pending voter approval in the general election.
🇺🇸JUST IN: ARIZONA TO ADVANCE CRYPTO TAX EXEMPTION BILLS
— Coin Bureau (@coinbureau) January 27, 2026
Arizona lawmakers advanced two bills that would exempt cryptocurrencies from property taxes.
The push continues despite Governor Katie Hobbs repeatedly vetoing crypto legislation in 2025. pic.twitter.com/ElP9Da8yFM
Arizona’s Crypto Tax Push Moves Ahead
The proposed legislation, introduced by Senator Wendy Rogers, aims to define virtual currencies as a medium of exchange and store of value, exempting them from property tax. The bill includes Bitcoin, Ethereum, and stablecoins, treating them all under one classification to simplify regulation.
Key components of the bill:
- Defines virtual currency as a digital representation of value used for exchange and savings.
- Prohibits ad valorem taxation (a tax based on the assessed value) on digital assets.
- Requires voter approval through a ballot referendum in November.
This renewed effort comes after similar initiatives failed to gain traction in the past. A previous version of the property tax exemption passed the Senate last year but stalled in the House.
Political Divide Between Legislature and Governor
While the Legislature is increasingly open to digital asset policy reform, Governor Katie Hobbs has shown resistance. During the 2025 legislative session, she vetoed four crypto-related bills, including:
- Senate Bill 1025: Would have let the state invest in Bitcoin through a Strategic Reserve
- Senate Bill 1373: Proposed a Digital Assets Strategic Reserve Fund funded by seized crypto
- Senate Bill 1024: Sought to let state agencies accept crypto for fines, taxes, and fees
- House Bill 2324: Proposed a Bitcoin and Digital Assets Reserve Fund managed by the state
Hobbs cited concerns over the volatility of digital assets and the risks involved in state-level crypto investments. Her stance may influence the final outcome if the current bills face executive scrutiny again.
Voter Referendum Could Mark a Turning Point
The key difference this time is the inclusion of a voter referendum through S.C.R. 1003, which could bypass the Governor’s opposition entirely. If passed by the Legislature, Arizona voters will be asked in November whether to adopt a constitutional amendment that would ban property tax on digital assets.
This move could:
- Set a precedent for crypto tax treatment in other states.
- Increase Arizona’s attractiveness to crypto investors and businesses.
- Reignite national discussions on digital asset classification and regulation.
The legislation also aligns with Arizona’s earlier steps to update unclaimed property laws to preserve cryptocurrencies in their original form and introduce tighter rules for crypto ATM operators.
SQ Magazine Takeaway
I think this is a big moment for crypto policy in the U.S. If Arizona voters greenlight this move, it could mark the start of a broader shift in how digital assets are treated by state governments. What stands out to me is how lawmakers are using a constitutional amendment to bypass political roadblocks and let the public decide. If successful, this could push more states to follow suit and bring long-needed clarity to crypto taxation.
