Bitcoin News Today: Senator Lummis Proposes Tax Parity for Digital Assets to Foster Innovation

Senator Cynthia Lummis (R-WY) has introduced comprehensive digital asset tax legislation aimed at modernizing the U.S. tax code to align with the realities of the digital economy. The bill, unveiled in July 2025, includes a $300 de minimis exemption for small digital asset transactions, deferral of income recognition for mining and staking rewards until sale, and parity in tax treatment with traditional financial assets. These provisions seek to reduce compliance burdens for everyday users while fostering innovation in the crypto sector . Lummis emphasized that the legislation addresses "archaic tax policies" that risk stifling American innovation, particularly for Bitcoin users engaging in low-value transactions like purchasing goods or services .

A key component of the bill is the de minimis rule, which excludes gains or losses on transactions under $300 from taxable events, with a $5,000 annual cap. This provision targets the impracticality of tracking small purchases, such as buying coffee with Bitcoin, and aims to simplify compliance for ordinary users. The rule also includes inflation adjustments starting in 2026, ensuring its relevance as economic conditions evolve . For miners and stakers, the legislation defers tax recognition until assets are sold, aligning with the economic reality of when income is realized. Critics, such as the Tax Law Center, argue that deferring income on staking rewards may create inconsistencies with long-standing tax principles, but Lummis' team contends it prevents cash flow challenges for participants .

The bill also expands the tax treatment of digital asset lending agreements to mirror existing rules for securities lending. This change ensures that lending digital assets does not trigger immediate taxable events, a provision intended to encourage capital efficiency in tokenized markets . Additionally, the legislation revises the wash sale rule to apply to digital assets, closing a perceived loophole that allowed tax-loss harvesting strategies unavailable to traditional securities investors. Exceptions for dealers and business transactions are included to maintain flexibility for legitimate trading activities .

Lummis' proposal extends to charitable contributions, exempting actively traded digital assets from qualified appraisal requirements. This provision is expected to streamline donations of crypto to charities, which have historically faced bureaucratic hurdles due to valuation complexities. The bill also introduces a mark-to-market election for digital asset traders and dealers, allowing them to recognize gains and losses annually based on fair market value, akin to rules for securities traders . These measures aim to create a level playing field between digital and traditional financial assets.

Industry stakeholders have welcomed the bill as a step toward regulatory clarity. The Chamber of Digital Commerce praised the deferral of staking and mining taxes, calling the current system a "long-overdue mistake" . However, critics caution that some provisions, such as the de minimis exemption, may create preferential treatment for digital assets compared to other asset classes. The Tax Law Center noted that such subsidies could come at a federal budget cost and require further scrutiny of their economic impacts . Despite these concerns, Lummis' team remains optimistic, emphasizing the bill's bipartisan potential and its alignment with the reconciliation process, which allows passage with a simple majority .

The legislation's estimated $600 million in net revenue over the 2025-2034 budget window, as calculated by the Congressional Joint Committee on Taxation, underscores its fiscal significance. While the bill's sunset clause in 2035 introduces long-term uncertainty, it reflects lawmakers' intent to treat the reforms as transitional measures. For now, the proposal represents a pivotal attempt to harmonize digital asset taxation with traditional financial frameworks, potentially reshaping the U.S. crypto landscape and reducing barriers to mainstream adoption .

Source: [1] U.S. Senator Cynthia Lummis (https://www.lummis.senate.gov/press-releases/lummis-unveils-digital-asset-tax-legislation/)

[2] Decrypt (https://decrypt.co/328496/bitcoin-crypto-tax-exemptions-lummis-senate-bill)

[3] Tax Law Center (https://taxlawcenter.org/blog/lummis-bill-would-provide-new-rules-for-digital-assets)

[4] Deepnewz (https://deepnewz.com/us-legislation/senator-cynthia-lummis-introduces-bill-300-exemption-to-remove-bitcoin-capital-635549d3)

[5] Bitbo (https://bitbo.io/news/lummis-bitcoin-tax-exemption/)

[6] Coincentral (https://coincentral.com/senator-lummis-demands-tax-relief-as-bitcoin-miners-face-double-hits/)

[7] Forbes (https://www.forbes.com/sites/tonyaevans/2025/07/09/lummis-crypto-tax-reform-bill-could-transform-us-digital-asset-rules/)

[8] CCN (https://www.ccn.com/news/crypto/senator-lummis-crypto-tax-relief-trump-big-beautiful-bill/)