Cynthia Lummis Backs Jack Dorsey's Call for Tax Relief on Bitcoin Transactions, Cites Her Introduced Bill

Sen. Cynthia Lummis (R-Wyo.) supports Block Inc. CEO Jack Dorsey's call for tax relief on Bitcoin transactions, citing a bill she introduced in June that exempts gains from small transactions up to $300 per transaction with an annual cap of $5,000 per individual. Despite concerns about the limit being too low, Lummis believes the bill addresses the concerns.

Senator Cynthia Lummis (R-Wyo.) has introduced legislation that aims to exempt small Bitcoin transactions from capital gains tax reporting. The proposal, which was initially floated in June and is now being reintroduced, seeks to simplify the use of Bitcoin for everyday purchases by excluding transactions up to $300 per transaction with an annual cap of $5,000 per individual Lawmaker’s Proposal Aims to Make Small Bitcoin Buys Tax-Free in US^[3].

The bill, which is part of a broader effort to modernize tax rules for cryptocurrencies, was first introduced in June 2025 as an amendment to a budget reconciliation bill. However, it did not gain traction during the Senate vote-a-rama. Senator Lummis has since released a standalone draft bill that specifies the $300 threshold for gains or losses, capped at $5,000 annually per taxpayer, with inflation adjustments starting in 2026 Lawmaker’s Proposal Aims to Make Small Bitcoin Buys Tax-Free in US^[3].

The proposal has drawn mixed reactions from the crypto community. While some Bitcoin proponents welcome the reduced complexity, alternative payment coins such as Litecoin, DASH, and Dogecoin have raised concerns about fairness, arguing that their communities should also receive the same tax treatment Sen. Cynthia Lummis Proposes De Minimis Tax Exemption for Bitcoin Transactions Under $300 That Could Ease Reporting^[1]. Critics have also pointed out that Bitcoin's variable fees and confirmation times remain obstacles to retail adoption, even with tax relief Sen. Cynthia Lummis Proposes De Minimis Tax Exemption for Bitcoin Transactions Under $300 That Could Ease Reporting^[1].

The legislation also includes provisions for tax deferral on mining and staking rewards until sale, alignment of crypto lending with securities taxation, 30-day wash sale rules, and simplified charitable donations under $5,000. The Joint Committee on Taxation projected the package would yield about $600 million in revenue over 2025-2034 through improved compliance Lawmaker’s Proposal Aims to Make Small Bitcoin Buys Tax-Free in US^[3].

Senator Lummis believes the bill addresses the concerns about the low threshold, stating that it is a pragmatic fix for a paperwork problem that could help merchants and wallets experiment with Bitcoin. However, she acknowledges that the reform needs to be part of a broader package that includes clear broker-reporting rules, anti-fragmentation protection, and fiat-conversion tools to become a realistic step toward broader merchant adoption Dorsey, Lummis Push for Bitcoin Tax Relief as Block Expands BTC Payments^[2].

The proposed de minimis exemption aims to reduce tax and recordkeeping friction for small Bitcoin transactions, potentially increasing their frequency in everyday use. However, the effectiveness of the measure will depend on its implementation and the response from the IRS and tax professionals. Consumers and lawmakers are encouraged to review the proposed threshold and definitions in the draft legislation and consult tax professionals for transitional guidance on reporting until law changes Sen. Cynthia Lummis Proposes De Minimis Tax Exemption for Bitcoin Transactions Under $300 That Could Ease Reporting^[1].