ARIZONA HOUSE OF REPRESENTATIVES

SB 1091: income tax payments; bitcoin

PRIME SPONSOR: Senator Petersen, LD 12

BILL STATUS: Conference

Abstract

Relating to income tax payments by cryptocurrency.

Provisions

1. Authorizes DOR to develop, adopt and use a payment system that enables the remittance and collection of TPT in real time at the point of sale, including payments of additional amounts arising from audits. (Sec 1)

2. Requires DOR to study each of the following:

a. Whether a taxpayer may pay their income tax liability using a payment gateway that uses peer-to-peer systems;

b. The conversion of cryptocurrency payments to USD at the prevailing rate after receipt; and

c. The process of crediting the taxpayer's account with the converted dollar amount received, less any fees or costs incurred for conversion. (Sec. 2)

3. Allows DOR to design, develop and provide for trial demonstrations of the adaptation, application and use of technology to enable immediate remittance and collection of income tax and TPT payments, AT THE OPTION OF THE TAXPAYER, at the point of sale and for payments of additional amounts arising from audits.

a. Permits DOR, in execution of the trial program, to do each of the following:

i. Contract with one or more private vendors and consultants;

ii. Identify practical issues, limitations and adaptations in the system and procedures of the department; and

iii. Identify legal issues and recommend legislation that may be necessary to enable the application of new technology.

b. Requires DOR to submit a report of its findings to the Governor, President of the Senate, Speaker of the House of Representatives, Chairpersons of the House Ways and Means and Senate Finance Committees and the SOS. (Sec 3)

4. Makes technical and conforming changes. (Sec. 2)

Current Law

A.R.S. § 43-501 requires all taxpayers to pay their income tax liability by April 15^th of each year, unless an extension is granted. Income tax liability, including interest and penalties, may be paid by check, electronic transfer or cash.

Additional Information

NCSL defines cryptocurrencies as digital or virtual currencies used for electronic payment transactions. The currencies are a digital representation of value that functions as a medium of exchange, a unit of account, store of value and use encryption methods to make them secure and nearly impervious to counterfeiting (IRS Notice 2014-21).

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Fifty-third Legislature                  SB 1091

Second Regular Session                               Version 4: Conference

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