Several U.S. lawmakers have introduced the Virtual Currency Tax Fairness Act to strengthen “the legitimacy of cryptocurrency in our digital economy.” The bill also aims to expand the use of cryptocurrencies for payments.
Representatives Suzan DelBene and David Schweikert introduced the “Virtual Currency Tax Fairness Act of 2022” on Thursday. The bipartisan bill is co-sponsored by Congressmen Darren Soto and Tom Emmer.
The bill “would create a workable structure for taxing purchases made with virtual currency, also known as cryptocurrency,” the lawmakers explained. It will also expand the use of cryptocurrency for payments and further strengthen “the legitimacy of virtual currency in our digital economy.”
The current legislation states that any crypto gains must be reported as taxable income regardless of the size or purpose of the transaction, the lawmakers stressed, emphasizing that “This includes purchases as small as buying a cup of coffee.”
Asserting that the existing law “makes the everyday use of virtual currency near impossible, discouraging people from using it, and inhibiting the growth of our digital economy,” the lawmakers detailed:
The Virtual Currency Tax Fairness Act would exempt personal transactions made with virtual currency when the gains are $200 or less.
Jerry Brito, executive director of cryptocurrency think tank Coin Center, explained: “Today you have to keep track of and report every transaction you make using them, whether it’s a $10,000 investment trade or whether you’re buying a 99¢ song online or a latte at a cafe.” He elaborated:
This obviously creates friction and puts cryptocurrencies at a disadvantage relative to other digital payment methods.
The bill would “treat cryptocurrencies similarly to how foreign currency is now treated,” Brito noted.