A new bill proposed by two US senators would make cryptocurrency transactions for less than $50 tax-free.
The Virtual Currency Tax Fairness Act of 2022, which was proposed by Pennsylvania Republican Senator Pat Toomey and Arizona Democratic Senator Kyrsten Sinema, has a stated goal of “simplifying the use of digital assets for everyday purchases,” according to the press release attached to the bill.
See also: Nancy Pelosi’s husband sells $4 million worth of Nvidia stock at a huge loss
“While digital currencies have the potential to become a regular part of Americans’ everyday lives, our current tax code stands in the way,” said Senator Toomey. “The Virtual Currency Tax Fairness Act will allow Americans to use cryptocurrencies more easily as a daily payment method by exempting small personal transactions like buying a cup of coffee from tax,” he added.
“We’re protecting Arizonans from surprise taxes on everyday digital payments, so as the use of digital currencies increases, Arizonans can keep more of their own money in their pockets and continue to thrive,” Senema said.
According to the US Senate Committee on Banking, Housing and Urban Affairs, a crypto transaction can be a taxable event if the digital asset increases in value due to capital gains tax rules. The bill would create a tax exemption for all transactions under the amount of $50, as well as any winnings less than $50 on in-person transactions.
See also: Why is crypto crashing? Mark Cuban Says “Crypto Is Going Through The Hiatus That The Internet Went Through”
The new bill aims to “amend the Internal Revenue Code of 1986 to exclude from gross income de minimis gains from certain sales or exchanges of virtual currency, and for other purposes,” the bill states.
Some crypto and blockchain organizations support the bill as leaders from the Blockchain Association, Association for Digital Asset Markets and Coin Center all highlighted the bill in the release.
The bill has yet to be voted on in either chamber of Congress, but versions of this bill have at least some bipartisan support in the House. Rep. Suzan DelBene (WA-01) and David Schweikert (AZ-06) introduced an earlier version of the bill earlier this year.
See also: Fed raises interest rates by 0.75 percentage points and signals more increases on the way
The bill’s introduction comes as a “crypto winter” has taken shape.
Prices for crypto like bitcoin BTCUSD,
and ether ETHUSD,
has continued to crash. Values for many cryptos are down over 70% from 2021 highs. The total market capitalization of all crypto reached nearly $3 trillion in parts of 2021, but fell below $1 trillion in July.
Recent crypto market conditions have not only led to a dramatic decline in crypto prices, but also impending layoffs at crypto-centric companies. Crypto exchange Coinbase COIN,
laid off 18% of its staff, BlockFi says it plans to lay off 20% of its staff, NFT platform OpenSea cuts its workforce by 20% and Gemini plans to lay off 10% of its staff.
