As part of the several crypto tax provisions, United States Senator Cynthia Lummis is proposing a new crypto tax exemption in the “Big Beautiful Bill.” Lummis, on Monday, said the new tax amendment will relieve some burden on small-scale activities, backing much of President Donald Trump’s agenda.
The U.S. Senator also sought to slip language into the bill, which has been a subject of debate in Congress among Democratic senators. This indicates a dramatic shift in the taxation of cryptocurrency activities in the United States. The United States hopes to continue with its crypto-friendly approach, as the country continues to embrace digital assets as an everyday currency.
What Senator Cynthia Lummis Proposes
U.S. Senator Cynthia Lummis wants to waive taxes on small-scale crypto activities in the new Big Beautiful Bill. She is pushing to include a crypto tax amendment in the “Big Beautiful Bill,” proposing tax exemption for crypto transactions under $300 (up to $5,000 annually).
Lummis said the current tax approach has people double-taxed on both the front and back end of crypto activities, including mining and staking. On her X account, she advocated for the stop of the unfair tax treatment to ensure the United States achieves its dream of becoming a crypto superpower. The proposed tax measures would reduce much of the burden of deciding capital gains for people dealing in small transactions.
According to the Digital Chamber, the amendment pushed by Senator Lummis would repair the “long overdue mistake” on how staking, and other avenues of gaining crypto, are taxed. Senator Lummis’ provision solves the taxation on acquisition and point of sale by taxing rewards only when sold. For instance, validators in a Blockchain will only be taxed on gains when they sell assets obtained from their rewards.
Mining, Assets from Airdrops Will Get Similar Tax Treatment
Apart from taxing stakers only on sold assets, mining and assets from airdrops and forks will also receive similar tax treatment. According to Lummis, they will only be taxable upon sale to avoid double taxation. The new amendment clarifies that assets created in the digital mining process won’t be taxed unless sold.
The proposition also addresses tax issues relating to lending, wash sales, and charitable contributions. For years, lawmakers have sought to close the loophole, which crypto investors have used to avoid paying taxes. Under current rules, crypto investors indulge in “tax-loss harvesting,” where they sell investments at a loss and immediately repurchase them.
Will the Tax Exemption Amendments Get a “Yes”?
President Donald Trump’s “Big Beautiful Bill’ faces a lot of opposition in Congress, particularly from Democrats. Although the bill’s amendment process, called “vote-a-rama,” began on Monday, there’s no telling when the process will conclude. While most Republican Senators are in favor, Democratic Senators are opposing, citing potential cuts to Medicaid and green energy initiatives.
It wouldn’t be easy to get a “yes” from all members. Even more difficult considering the provisions could add over $3 trillion to the United States budget deficit.
Speaking of legislation, Senator Lummis and other senators are also pushing for the passage of the Crypto Market Structure Bill. According to Senate Banking Committee Chair Tim Scott, the bill is projected to be passed by Sept. 30. The bill lays the groundwork for trading crypto and establishes regulatory boundaries between the SEC and the CFTC. It also provides clarity on asset classification.
