state agencies; payments; cryptocurrency

Plain English Breakdown

The bill does not specify costs or fiscal impacts associated with setting up these systems.

State Agencies; Virtual Currency Payments

The bill allows state agencies to accept virtual currency as a payment method for fines, taxes, fees, and other payments through agreements with service providers.

What This Bill Does

• Allows state agencies to make deals with virtual currency service providers to take in virtual money as payment.
• Adds rules for how these agreements should work, including terms and conditions for accepting or declining virtual currency payments.
• Permits state agencies to pay fees related to virtual currency transactions or require people making payments with virtual money to cover those fees.

Who It Names or Affects

• State agencies that can now accept virtual currency as payment through agreements with service providers.
• People and businesses who want to make payments using virtual currency.

Terms To Know

Virtual Currency

Digital money that works like real money, but isn't legal tender from a government. Examples include Bitcoin and Ethereum.

Service Provider

A company or person who can change virtual currency into regular money.

Limits and Unknowns

• The bill only allows state agencies to accept virtual currency if they make a deal with a service provider.
• It doesn't say how much it will cost the government to set up these systems.
• The rules about accepting and declining payments are left up to each agency's agreement.

Official Summary Text

SB1043 - 572R - Senate Fact Sheet

Assigned to
FIN���������������������������������������������������������������������������������������������������������������� AS
PASSED BY COW

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

AMENDED

FACT SHEET FOR
S.B. 1043

state agencies;
payments; cryptocurrency

Purpose

Effective
January 1, 2027, authorizes a state agency to enter into an agreement with a virtual
currency service provider to accept virtual currency as a payment method for
any amount due to the state agency or the state. Allows tax payments to be made
in virtual currency if the Arizona Department of Revenue (ADOR) enters into an
agreement with a virtual currency service provider to accept virtual currency as
a payment method.

Background

Virtual currency
is a digital representation of value, other than a representation of the U.S.
dollar or a foreign currency, that functions as a unit of account, a store of
value and a medium of exchange. Some virtual currencies are convertible,
which means that they have an equivalent value in real currency or act as a
substitute for real currency (
IRS
).

Transaction
privilege tax (TPT) is a gross receipts tax levied for the privilege of
conducting business in Arizona and is imposed under 16 business
classifications. Statute requires businesses to pay TPT to ADOR by the 20th day
of the following month after the tax is incurred. All TPT payments must be made
to ADOR by bank draft, check, cashier's check, money order, cash or electronic
funds (A.R.S. ��
42-5008
;

42-5014
;
and
42-5018
).

Individual and
corporate income tax is levied on taxable income. Income tax may be paid in
installments or in one payment, as prescribed. Corporate income tax can be paid
by electronic funds transfer and individual income tax can be paid by check,
cashier�s check, certified check, money order, U.S. currency or by the
application of an overpayment from a prior tax return (A.R.S. ��
43-1011;
Version 2
and
43-1111
;

A.A.C.
R15-2C-101
and
R15-10-302
).

There is no anticipated
fiscal impact to the state General Fund associated with this legislation.

Provisions

1.

Allows a state agency to enter into an agreement with a virtual currency
service provider to provide a method to accept virtual currency as a payment
method of fines, civil or other penalties, rent, rates, taxes, fees, charges,
revenue, financial obligations and special assessments to pay any amount due to
the state agency or the state.

2.

Allows a state agency that has entered into an agreement with a virtual
currency service provider to accept virtual currency as a payment method for
any amount due to the state agency or the state.

3.

Allows ADOR to enter into an agreement with a virtual currency service
provider to accept virtual currency for remittances of TPT and municipal tax.

4.

Adds virtual currency to the permissible methods of remitting taxes to
ADOR, if ADOR enters into an agreement with a virtual currency service
provider.

5.

Requires
an agreement with a virtual currency service provider to:

a)

govern
the terms and conditions on which virtual currency may be accepted or declined
as a form of payment; and

b)

provide
the manner in and conditions on which a virtual currency service provider must
pay the state by means of virtual currency or U.S. dollars.

6.

Allows a state agency to pay any transaction service fees specified in a
virtual currency payment agreement or require a person that pays with virtual
currency to pay the service fees associated with the virtual currency transaction.

7.

Deems a person that pays with virtual currency liable for the payment
and all interest and penalties until the state agency has received final and
unconditional payment of the full amount due from the virtual currency service
provider for the transaction.

8.

Defines
virtual currency
as a digital representation of value
that functions as a medium of exchange, a unit of account and a store of value,
including Bitcoin, Ethereum, XRP, Litecoin, Bitcoin Cash and Stablecoins.

9.

Excludes, from the definition of
virtual currency,
legal tender
issued by the United States or a foreign government.

10.

Defines
virtual
currency

service provider
as a person or entity with demonstrated
experience converting any form of virtual currency, including Bitcoin,
Ethereum, XRP, Litecoin and Bitcoin Cash, to legal tender.�

11.

Defines
stablecoin

as a
payment stablecoin
as defined in the federal Guiding and Establishing
National Innovation for U.S. Stablecoins act of 2025 and that is issued in
compliance with all applicable federal laws governing such issuance.

12.

Makes
technical changes.

13.

Becomes
effective on January 1, 2027.

Amendments Adopted by Committee
of the Whole

1.

Allows a state agency to enter into an agreement with a virtual currency
service provider, rather than a cryptocurrency service provider.

2.

Replaces the definition of
cryptocurrency
with a definition of
virtual
currency
.

3.

Defines
stablecoin.

4.

Makes conforming changes.

Senate Action

FIN������� 1/26/26� ���� DP������ 4-3-0

Prepared by Senate Research

February 25, 2026

MG/SJ/hk

Current Bill Text

SB1043 - 572R - S Ver

CORRECTED

Senate Engrossed

state
agencies; payments; cryptocurrency

(now:� state
agencies; virtual currency payments)

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1043

AN
ACT

amending
title 35, chapter 1, article 3, Arizona Revised Statutes, by adding section 35-156;
amending sections 42-5018 and 43-505, Arizona Revised Statutes;
relating to the control of receipts and expenditures.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Title 35, chapter 1, article 3,
Arizona Revised Statutes, is amended by adding section 35-156, to read:

START_STATUTE
35-156.

Method of payment; virtual currency; agreement; definitions

A. A state agency may
enter into an agreement with a
virtual currency
service provider
to provide a method to accept
virtual currency
as a payment
method of fines, civil penalties or other penalties, rent, rates, taxes, fees,
charges, revenue, financial obligations and special assessments to pay any
amount due to that agency or this state.

B. The agreement shall:

1. Govern the terms and
conditions on which
virtual
currency

as a means of payment can be accepted or declined.

2. Provide the manner
in and conditions on which a
virtual currency
service provider
shall pay this state by means of
virtual currency
or united states
dollars pursuant to the agreement.

C. A state agency that
has entered into an agreement with a
virtual currency
service provider
as provided by this section may accept
virtual currency
as a method of
payment for fines, civil penalties or other penalties, rent, rates, taxes,
fees, charges, revenue, financial obligations and special assessments to pay
any amount due to that agency or this state.

D. A state agency may
pay any service fees specified in the agreement for the
virtual currency
transaction or may
require a person that pays with
virtual currency
to pay the service
fees associated with the
virtual currency
transaction.

E. A person that pays
with
virtual
currency

is liable for the payment and all interest and penalties until the state agency
has received final and unconditional payment of the full amount due from the
virtual currency
service provider
for the
virtual
currency

transaction.

F. For the purposes of
this section:

1. "VIRTUAL
CURRENCY" MEANS A DIGITAL REPRESENTATION OF VALUE THAT FUNCTIONS AS A
MEDIUM OF EXCHANGE, A UNIT OF ACCOUNT AND A STORE OF VALUE, INCLUDING BITCOIN,
ETHEREUM, XRP, LITECOIN AND BITCOIN CASH, AND INCLUDES STABLECOINS. VIRTUAL
CURRENCY DOES NOT INCLUDE LEGAL TENDER ISSUED BY THE UNITED STATES OR A FOREIGN
GOVERNMENT.

2. "
VIRTUAL CURRENCY
service
provider" means a person or entity with demonstrated experience converting
any form of
virtual
currency
,
including bitcoin, ethereum,
xrp,
litecoin and bitcoin cash, to
legal tender.

3. "STABLECOIN"
MEANS A PAYMENT STABLECOIN AS DEFINED IN THE GUIDING AND ESTABLISHING NATIONAL
INNOVATION FOR U.S. STABLECOINS (GENIUS) ACT OF 2025 (P.L. 119-27) AND THAT IS
ISSUED IN COMPLIANCE WITH ALL APPLICABLE FEDERAL LAWS GOVERNING SUCH ISSUANCE.
END_STATUTE

Sec. 2. Section 42-5018, Arizona Revised
Statutes, is amended to read:

START_STATUTE
42-5018.

Method of payment

a.
All remittances of taxes
imposed by this article shall be made by bank draft, check, cashier's check,
money order, cash or electronic funds transfer to the department, which shall
issue receipts therefor to the taxpayers, but no remittance other than cash
shall be final discharge of liability for the tax levied by this article until
it has been paid in cash to the department.

B. In addition to the methods
described in subsection A of this section, the department may enter into an
agreement pursuant to section 35-156 to accept
virtual
currency for remittances of taxes imposed by this article.
END_STATUTE

Sec. 3. Section 43-505, Arizona Revised
Statutes, is amended to read:

START_STATUTE
43-505.

Tax payments made to department; order of crediting

A. The tax and any interest and penalties shall be
paid to the department. Remittances may be in the form of
either:

1.
A check payable to the
department during such
a
time and under such regulations
as the director may prescribe. If a check is not paid by the bank on
which it is drawn, the taxpayer tendering the check
shall remain

is
liable for the payment of the tax and all interest and
penalties as if
he had

the check were
not
tendered
the check
.

2. If the department enters into an
agreement pursuant to section 35-156,
virtual
currency.

B. The department shall credit payments against a
taxpayer's unpaid tax liability before crediting payments against any interest
or penalties.
END_STATUTE

Sec. 4.
Effective date

This act is effective from and after
December 31, 2026.