- A crypto tax bill was tabled in the Senate yesterday which would scrap taxation of crypto sales for everyday purchases under $50 in value.
- The aim of the bi-partisan Virtual Currency Tax Fairness Act is to encourage everyday use of crypto
- A version of the bill was introduced in February with a $200 limit
It’s one of the things that is holding back cryptocurrency adoption, but two senators on opposing sides of the house have offered a potential solution to the issue of crypto tax. Senators Pat Toomey and Kyrsten Sinema yesterday introduced the bi-partisan Virtual Currency Tax Fairness Act which would scrap tax on cryptocurrency purchases under $50 in a bid to make the new financial system more appealing and more viable as an everyday option for daily usage. Such a bill is the only way that cryptocurrency usage has a hope of mainstream adoption, unless it is going to be reclassified as currency, which of course it won’t.
Tax Implications Will Inevitably Harm Crypto Adoption
The tax implications of using cryptocurrency on a daily basis for small purchases is something that, while many people will not knowingly consider it, will inevitably become one of the key reasons why cryptocurrency adoption hits a ceiling. Even if the technology were sufficient to allow everyone in the world to suddenly use cryptocurrencies to pay for everyday items as easily as fiat currencies, the fact that many countries would consider such purchases a taxable event would preclude their uptake.
The Virtual Currency Tax Fairness Act aims to scrap that concern, at least in the US, with Toomey saying that “our current tax code stands in the way” of such adoption, adding that, “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.”
Prior Version Called for Relief up to $200
According to the bill, the new legislation seeks 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.” A prior version of the same bill was tabled in February and has further bipartisan support from Suzan DelBene, David Schweikert, Darren Soto and Tom Emmer.
That version of the bill called for scrapping tax for crypto purchases under $200, but $50 is a much more feasible figure given the intent behind the bill is everyday spending. We can but hope that such a bill is passed, otherwise people will continue to stay away from using cryptocurrencies as an everyday option, even if they can.
