Digital Asset Tax Writers Finalize Bill as Crypto Picks Up Steam

A pair of House tax writers unveiled cryptocurrency taxation legislation Tuesday as Congress continues to focus its attention on regulating various aspects of digital assets.

The bill, released by House Ways and Means Committee members Reps. Steven Horsford (D-Nev.) and Max Miller (R-Ohio), follows a discussion draft the pair released in March. The bill was released in the aftermath of a bipartisan members-only roundtable last week on crypto taxation, a signal that they are seeking consensus on a legislative proposal before the end of this Congress.

The industry has asked Congress to weigh in on how digital assets should be taxed, as other committees take up other aspects of cryptocurrency treatment, such as market structure.

“We’re not creating special treatment for digital assets,” Horsford said in an interview with Bloomberg Tax. “We are creating clear, enforceable rules that bring parity between digital assets and traditional finance.”

Miller and Horsford have been fine tuning their proposal they’ve dubbed the PARITY Act for months.

“Any serious digital asset tax framework should start with this as the framework,” Horsford continued. “I hope that my colleagues on the Ways and Means Committee and the broader Congress will understand that these are the principles that tax policy should include.”

Bill Changes

The latest version of the bill opts against making a new exemption for most small crypto transactions, which has been raised as a concern over codifying the tax treatment of digital assets. Instead, the bill calls for a Treasury Department study on the so-called de minimis exemption and requires interim guidance within 180 days identifying areas where Treasury might already have authority to provide some relief.

The two tax writers have sought to engage industry leaders and lawmakers around their legislation as the committee reportedly works on its own version of legislation. Ways and Means Chair Jason Smith (R-Mo.) has said legislation was close to release, but needed bipartisan support before his committee would consider it.

Lawmakers leaving the roundtable last week understood that making tax policy will provide predictability and seek to ensure the US is a leader in the global digital economy. But, they emphasized how complicated the issue is, highlighting the challenge Miller and Horsford have as they seek to educate members who had questions on topics that ranged from consumer protection to preventing the use of crypto to fund criminal activity.

Miller said he was confident they could achieve passage by the end of the Congress despite the difficult policy terrain.

“The naysayers will say we can’t do it, but those naysayers also wouldn’t believe that I am working with Congressman Horsford on multiple bills,” Miller said in a written response.