ARIZONA HOUSE OF REPRESENTATIVES Fifty-fifth Legislature Second Regular Session
	House: COM DPA/SE 9-1-0-0 | 3^rd Read 52-7-1-0 Senate: FIN DP 6-3-1-0 | 3^rd Read 22-4-4-0

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HB 2204: technical correction; wage board; powers

NOW: taxation; subtraction; virtual currency

Sponsor: Representative Weninger, LD 17

Senate Engrossed

Overview

Allows a person to subtract gas fees paid for virtual currency from their gross income, and permits virtual currency and non-fungible tokens (NFTs) received by airdrop to be considered a gift for tax purposes.

History

The Federal Internal Revenue Code (IRC) allows a person to exclude, as a taxable gift, the first $10,000 made to any person during the taxable calendar year. For gifts made after 1998, the amount may be increased by a cost-of-living adjustment.

Provisions

1. Allows the value of any virtual currency and NFTs which a person receives by airdrop to be subtracted from that individual's gross income. (Sec. 1)

2. Limits the airdrop income subtraction to the threshold amount prescribed in the IRC. (Sec. 1)

3. Permits a person to subtract gas fees from their gross income if, in calculating the gain or loss of virtual currency sales, that person did not include, in the basis of the virtual currency, any gas fees for the virtual currency. (Sec. 2)

4. Outlines an optional itemized deduction from an individual's gross income for casualty deductions, including a 100% deduction for virtual currency and NFT losses. (Sec. 3)

5. Defines airdrop as the receipt of virtual currency through a means of distribution of virtual currency to the distributed ledger addresses of multiple taxpayers. (Sec. 1)

6. Contains a delayed effective date of January 1, 2023. (Sec. 4)

7. Defines foreign currency, gas fee and virtual currency. (Sec. 2)

8. Makes conforming changes. (Sec. 3)

Senate Amendments

1. Permits a person to subtract NFT gas fees from their gross income if, in calculating the gain or loss of NFT sales, that person did not include, in the basis of the NFT, any gas fees for the NFT.

2. Modifies the optional itemized deduction from an individual's gross income for casualty deductions relating to the personal casualty loss of virtual currency and NFTs.

3. Defines non-fungible token.

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7.                   HB 2204

8. Initials PRB/NM    Page 0 Senate Engrossed

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