HB 2204
Initials PRB/NM Page 1 Conference Committee
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
HB 2204: technical correction; wage board; powers
NOW: taxation; subtraction; virtual currency
Sponsor: Representative Weninger, LD 17
Conference Committee
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.
Conference Committee Amendments
1. Removes all statutory changes made by the bill relating to casualty losses.
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☒ Fiscal Note