
Key Points:
- Senator Cynthia Lummis has introduced a series of crypto tax proposals that had been previously considered for inclusion in President Trump’s budget but are now being advanced as standalone legislation.
- The proposed bill establishes a $300 ‘de minimis’ threshold under which crypto transactions will not be subject to capital gains tracking.
- This legislation seeks to prevent double taxation on rewards from staking, mining, airdrops, and will simplify accounting for crypto dealers and charitable contributions.
Tax initiatives intended to alleviate burdens on crypto participants, including one to exempt capital gains for minor transactions, were originally excluded from President Trump’s significant budget initiatives but are now under independent consideration in the United States Senate.
Cynthia Lummis
U.S. Senator Cynthia Lummis introduced a bill to address perceived unfair tax regulations on cryptocurrency earnings. (Jesse Hamilton/CoinDesk)
Senator Lummis, leading the Senate Banking Committee’s crypto subcommittee, aims to alleviate several taxation issues faced by the digital assets sector. The proposed threshold of $300 aims to relieve people of capital gains scrutiny on minor day-to-day transactions while limiting this exemption to a total of $5,000 annually.
The proposed measures also aim to eliminate double taxation on digital assets received through staking, mining, and other means by only focusing taxation on gains upon sale rather than at the time of receipt. Additionally, it will allow traders and dealers to evaluate their assets based on current market values for accounting.
“We cannot allow our archaic tax policies to stifle American innovation, and my legislation ensures Americans can participate in the digital economy without inadvertent tax violations,” Lummis stated in a press release.
Lummis’s efforts face challenges due to time constraints in the Senate and competing priorities concerning other bills focused on crypto regulations and stablecoin frameworks. Her advocacy for establishing a federal Bitcoin reserve is also being pushed forward.
The utmost priority for the crypto industry in Congress currently revolves around establishing a regulatory framework for the oversight of digital assets markets. Lummis has publicly adhered to a deadline, recently communicated by Senator Tim Scott, to ensure this regulatory bill reaches Trump’s desk by the end of September.