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Committee advances bill barring local taxes on blockchain activity amid energy and water concerns
Summary
SB 1015, which would prohibit cities, towns and counties from imposing most taxes or fees on blockchain activity (with limited electricity tax exceptions), received a due-pass recommendation from the Senate Committee on Government after testimony about economic development and resource use.
The Senate Committee on Government recommended SB 1015, a measure sponsored in committee by Senator Wendy Rogers, that would prohibit municipalities and counties from imposing taxes or fees on the use of blockchain technology, while allowing narrowly defined electricity taxes.
Rogers described the bill as an effort to make Arizona “crypto friendly,” saying the state should set a clear, uniform approach for taxation of blockchain activity. She told the committee the bill is modeled on policies in other Western states that have taken steps to exempt blockchain-related personal property or otherwise encourage digital-asset industries.
Supporters argued the state should avoid a patchwork of local rules and taxes that could discourage investment. Alan Skilicorn testified in favor, saying a statewide standard would avoid inconsistent local responses and that the Legislature is the appropriate venue to set tax policy on this issue.
Opponents and some committee members raised resource concerns. Senator Priya Sundarashan and others noted that cryptocurrency mining and some data-processing activities can be energy- and water-intensive; Sundarashan said the state should not preempt local authority before sector resource impacts are fully understood. Sundarashan stated, “I vote no,” citing energy and water concerns and urging further analysis of infrastructure impacts.
Committee discussion referenced activity in other states, competing policy choices (property or sales tax exemptions, excise taxes, or preemption) and the absence of complete national data about total U.S. energy consumed by crypto activities. After debate, the committee voted to give SB 1015 a due-pass recommendation; the committee record shows 4 ayes, 2 nays and 1 not voting.
The bill proceeds with a committee recommendation and will face further consideration in the legislative process.
