United States: Bill to reduce crypto tax on transactions reintroduced as use cases increase
As the asset class has gone considerably mainstream over the past few years, countries worldwide are struggling with the formation of a clear crypto tax regime, especially as the dynamics and use cases of the industry continue to evolve.
The U.S. Treasury for instance, while having clear tax guidelines that list out cryptocurrencies as property rather than currencies, has also irked investors and lawmakers due to the strict reporting requirements. A bipartisan group of U.S. House Representatives is trying to change that by bringing back a bill that would exempt consumers from paying taxes on crypto payments of less than $200.
Interestingly, the Virtual Currency Tax Fairness Act of 2022, a successor of the one introduced in 2020, was announced on 3 February by Representatives Suzan DelBene, David Schweikert, Darren Soto, and Tom Emmer. Seeking an amendment of the Internal Revenue Code of 1986, the bill aims to exclude gains from certain personal transactions of virtual currency.
In a statement regarding the same, Representative Suzan DelBene said,
“Antiquated regulations around virtual currency do not take into account its potential for use in our daily lives, instead of treating it more like a stock or ETF.”
She added,
“Virtual currency has evolved rapidly in the past few years with more opportunities to use it in our everyday lives,” DelBene said in the announcement. “The U.S. must stay on top of these changes and ensure that our tax code evolves with our use of virtual currency.”
An earlier version of the bill was proposed in 2017 by Representative David Schweiker that sought to secure an exemption from taxation for cryptocurrency transactions worth less than $600.
It was reintroduced by both in 2020 after the threshold for
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