The Blockchain Association, a prominent cryptocurrency advocacy group based in the United States, has submitted recommendations to lawmakers regarding the potential legislation related to the tax treatment of digital assets.
In a letter dated September 8 addressed to US Senators Ron Wyden and Mike Crapo, the Blockchain Association voiced support for the Keep America Innovative Act. This act aims to modify reporting requirements for specific taxpayers engaged in cryptocurrency transactions. The association emphasized the importance of any legislation proposed by Congress in establishing "symmetry" in the taxation of both crypto and non-crypto assets. Furthermore, they stressed the need for clarification regarding income derived from cryptocurrency staking and mining.
Some of these recommendations closely align with those presented by another cryptocurrency advocacy group, Coin Center, in August. This includes advocating for the creation of a minimum threshold to exclude certain cryptocurrency transaction gains or losses from tax reporting requirements.
The Blockchain Association submitted its letter on the final day that the US Senate Financial Services Committee was accepting responses to their request made in July. The letter encouraged the committee to develop thoughtful and measured legislation that specifically addresses tax issues concerning digital assets. They urged caution to avoid enacting legislation that would impose more adverse tax treatment on digital assets compared to traditional assets. Instead, the focus should be on creating a level playing field for all assets.
The recommendations also encompass opposition to the proposed excise tax on digital asset mining outlined in President Joe Biden's fiscal 2024 budget. The association argued that such a tax could impede the growth and development of the cryptocurrency industry. This proposal, unveiled in March, includes a 30% excise tax on the electricity consumed by crypto miners.
In the wake of the Internal Revenue Service's announcement in July, which required filers to report staking rewards as gross income in the year they are received, US lawmakers have been seeking clarity on cryptocurrency tax guidance. This sets the stage for new tax standards for US taxpayers through 2024. Currently, the purchase, sale, and exchange of crypto assets are primarily taxed as capital gains and losses, and the same requirements apply to mining rewards.
