U.S. Senators Propose Bill to Cut Taxes on $50 Crypto Payments
- Senators Patrick Toomey and Kyrsten Sinema have introduced a new bill to the U.S. Senate to exclude small crypto transactions from capital gains tax requirements.
- The bill would apply to transactions worth less than $50, with a provision to adjust that benchmark alongside inflation.
- Similar bills, putting the benchmark at $200, have been introduced to Congress in the past.
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Similar initiatives have previously been introduced in two other bills still sitting in Congress, but there’s been little indication that they will be voted into law anytime soon.
Senators Introduce Bill on Tax-Free Crypto Transactions
A new bill aiming to cut taxes on small crypto payments has entered the U.S. Senate.
According to a Tuesday announcement, Senators Patrick Toomey (R-Pa.) and Kyrsten Sinema (D-Ariz.) have introduced a bill that aims to make crypto transactions of up to $50 exempt from capital gains taxes to the U.S. Senate. As things currently stand, the Internal Revenue Service treats crypto assets as property and crypto transactions as investments rather than payments, meaning Americans are obliged to track and pay capital gains taxes every time they exchange or sell cryptocurrency. This has dramatically hindered the potential use of the asset class in mainstream commerce, which in turn has been used by many critics and regulators as an argument against the crypto’s utility as money.
Dubbed the Virtual Currency Tax Fairness Act, the bipartisan bill seeks to exclude small crypto transactions from capital gains tax requirements. If voted into law, the bill would apply to transactions worth less than $50, with a provision to adjust that benchmark alongside inflation. Notably, similar provisions have been introduced to Congress in the past, including a homonymous bipartisan bill raised in February by Representatives Suzan DelBene, David Schweikert, Darren Soto, and Tom Emmer that had set the threshold benchmark at $200. In June, Senators Kirsten Gillibrand and Cynthia Lummis introduced a comprehensive crypto bill that, among many other things, also sought to cut taxes on all crypto transactions smaller than $200.
While crypto lobbying groups and the broader community have widely applauded the efforts to exempt small crypto transactions from capital gains tax requirements, the chances of any bills passing into law by year’s end are relatively low. The current legislative calendar—filled with non-crypto-related issues—closes before the midterm elections in November. Additionally, Senator Toomey will not be running for re-election, meaning he won’t be around to push the bill to its potential enactment next Congress.
Disclosure: At the time of writing, the author of this article owned ETH and several other cryptocurrencies.