Senator Lummis Introduces Crypto Tax Bill With $300 De Minimis Threshold

Senator Cynthia Lummis has introduced a comprehensive crypto tax bill in the U.S. Senate, aiming to address outdated tax laws that hinder innovation and burden everyday users of digital assets like Bitcoin. The bill seeks to simplify tax reporting and reduce the tax burden on crypto users and miners, fostering a more favorable environment for digital asset adoption and investment.

The bill includes several key provisions. One of the most notable is the establishment of a $300 de minimis threshold for tax exemption on small transactions. This means that transactions under $300 would be exempt from capital gains taxes, with an annual cap of $5,000. This provision is designed to make crypto spending as convenient as using a debit card, encouraging more people to use digital assets in their daily lives. Starting in 2026, the $300 amount will also adjust for inflation, ensuring that the threshold remains relevant over time.

The bill also proposes to eliminate double taxation for miners and stakers. Currently, these individuals are taxed once when they receive their rewards and again when they sell them. Lummis's bill aims to change this by taxing these rewards only when they are sold, aligning the tax treatment with that of other produced goods. This change would recognize the rewards as income at the point of sale rather than creation, directly impacting the profitability of staking operations for various assets.

Additionally, the bill addresses other digital asset tax issues, such as crypto lending and charitable contributions. It extends the same tax rules used for stock lending to digital assets, meaning that lending your crypto temporarily won’t count as a sale and won’t trigger taxes. This provision supports crypto lending and makes it easier for people to donate crypto to charity by removing the need for costly asset appraisals for commonly traded assets.

Senator Lummis argues that these fairer crypto tax rules can support innovation and attract global builders to the U.S. She believes that the plan could bring in about $600 million in tax revenue over the next ten years. However, the bill did not make it into the final version of a major budget bill that recently passed the Senate. The broader budget bill now moves to the House of Representatives for another vote. The failure to include the amendment in the budget bill means that the current complex tax structure for digital assets remains in place for now. This outcome is a setback for industry advocates who had hoped for significant tax relief, but it also highlights the ongoing challenges in navigating the regulatory framework for digital assets in the United States.

Despite this setback, Senator Lummis remains optimistic about the bill's prospects. With public comments now open, she is inviting everyone to have their say, hoping that the crypto proposal can still pass. The introduction of this bill is a significant development in the ongoing efforts to create a more favorable tax environment for digital assets. The proposed changes, if enacted, could have a substantial impact on the digital asset industry by simplifying tax reporting and reducing the tax burden on users and miners. Industry stakeholders will continue to monitor developments closely as the bill moves through the legislative process.