Biden signs crypto taxation into law, but a new bill aims to set exemption for miners
After months of stalling by both sides of the aisle, President Biden finally signed the trillion-dollar infrastructure bill into law, flanked by a bipartisan group of lawmakers. The law mandates both physical and digital infrastructure development, while its implementation costs are partially offset by new taxes, including a provision on taxing cryptocurrency transactions. As it currently stands, the infrastructure bill language asks that businesses like crypto exchanges report any digital asset transaction worth US$10,000 or more to the IRS. Moreover, those who initiate coin transfers would have to report to the IRS, too, plus it could seek taxable income retroactively.
Crypto proponents have expressed plenty of issues with the new law, such as its overly broad definition of brokers that have to report on transactions or pay taxes. Pending Treasury Department guidance, the law in its current form defines anyone as a transaction broker, including miners and coin or wallet developers. According to a bipartisan duo of Senators, this could prevent innovation in the digital asset space, so they are proposing an amendment bill with plenty of exemptions. Senate Finance Committee Chairman Ron Wyden (D-Oregon), and Cynthia Lummis, a Republican Senator from Wyoming, have co-sponsored a bill to amend the controversial crypto taxation language in the law.
Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets. This will protect American innovation, while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe...
Digital assets are here to stay in our financial system, and the decisions we make now will have impacts far into the future. We need to be fostering innovation, not stifling it.
Senator Wyden is also behind the Billionaires Income Tax proposal that forced Elon Musk to sell stock to pay taxes, at least according to Tesla's CEO. While that little stunt cost Tesla nearly US$200 billion in market capitalization already, it's evident that Senator Wyden isn't against crypto taxation or taxes in general. Together with Senator Lummis, they want to make sure that the new infrastructure bill just signed into law by President Biden wouldn't punish those who bring real value to the development of the digital assets revolution. It is not clear if or when Senator Cynthia Lummis' amendment bill will be making it to a vote. However, it does include provisions for retroactive application to the crypto transaction reporting language in the infrastructure law.