A new bill proposed by two U.S. Senators would make cryptocurrency transactions for less than $50 tax-exempt.
The Virtual Currency Tax Fairness Act of 2022, which was proposed by Republican Senator from Pennsylvania Pat Toomey, and Democratic Senator from Arizona Kyrsten Sinema, has a stated goal to “simplify the use of digital assets for everyday purchases,” according to the press release associated with the bill.
“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way,” Sen. Toomey said. “The Virtual Currency Tax Fairness Act will allow Americans to use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee,” he added.
“We’re protecting Arizonans from surprise taxes on everyday digital payments, so as use of digital currencies increases, Arizonans can keep more of their own money in their pockets and continue to thrive,” Sen. Sinema said.
According to the United States Senate Committee on Banking, Housing, and Urban Affairs, when a crypto transaction occurs, it can be a taxable event if the digital asset appreciated 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 gains less than $50 on personal transactions.
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 text of the bill reads.
Some crypto and blockchain organizations support the bill as leaders from Blockchain Association, the Association for Digital Asset Markets, and Coin Center all touted the bill in the release.
The bill has not yet been voted on in either chamber of Congress, but versions of this bill have at least some bipartisan support in the House. Reps. Suzan DelBene (WA-01) and David Schweikert (AZ-06) introduced a previous version of the bill earlier this year.
The bill’s introduction comes as a “crypto winter” has taken shape.
Prices for crypto like bitcoin
have continued to crash. Values for many cryptos are down over 70% from 2021 highs. The total market cap for all crypto nearly hit $3 trillion during parts of 2021, but dipped below $1 trillion in July.
Recent crypto market conditions have not only led to a dramatic decrease in crypto prices, but also impending layoffs at crypto-centric companies. Crypto exchange Coinbase
laid off 18% of its employees, BlockFi says it plans to lay off 20% of its employees, NFT platform OpenSea is cutting its workforce by 20% and Gemini plans to lay off 10% of its employees.