- Senator Cynthia Lummis introduced a bill to give U.S. crypto users new tax benefits.
- The legislation would let users skip capital gains reporting for most digital asset transactions under $300, with a yearly cap of $5,000.
- Crypto miners and stakers would pay taxes only when they sell their rewards, not when they receive them.
- The bill proposes simpler rules for donating cryptocurrencies to charities.
- No timeline has been set for when the bill will reach the Senate floor.
Senator Cynthia Lummis introduced a new bill on Thursday aiming to change how digital assets are taxed in the United States. The proposal targets everyday crypto users, miners, and those who donate digital currencies to charity.
The bill, currently referred to as the Lummis Crypto Tax Bill, would allow Americans to avoid paying capital gains taxes on most purchases made with cryptocurrencies if each transaction is under $300. There is a cap of $5,000 in total exemptions per year. The rule excludes buying cash, stablecoins, or business assets.
Under the new bill, people who earn crypto through mining or staking would only pay taxes when they sell or exchange these earned tokens. Previously, legal debates centered on whether rewards were taxable at the moment of creation. The legislation also includes changes that would make donating digital currencies to charity less complicated and would update rules so that lending digital assets, similar to securities lending, isn’t taxed.
“In order to maintain our competitive edge, we must change our tax code to embrace our digital economy, not burden digital asset users,” Lummis stated. She added, “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.”
Crypto advocates have pushed for a “de minimis” exemption on small transactions, saying it will help digital currencies be used for everyday payments. According to the bill’s summary, this change could make it easier for people to use crypto for purchases like food and services without extra tax paperwork.
A spokesperson for Lummis told Decrypt that there is no set date for when the bill will be debated by the Senate. Meanwhile, the Senate recently approved the GENIUS Act, which addresses the regulation of stablecoins and is awaiting a vote in the House. For those interested, the full bill text is available here.
The bill is expected to fulfill several requests from the crypto industry for clearer and more favorable tax treatment of digital assets in the U.S.
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