US lawmakers have reopened the debate on the digital asset tax with seven separate crypto tax proposals while Senate negotiators continue work on the CLARITY Act ahead of a possible vote before August.
Summary
- House lawmakers are reviewing seven independent crypto tax proposals including staking, mining, lending and stablecoins.
- Senate negotiators continue to hammer out provisions of the CLARITY Act ahead of a possible vote as early as August.
- Illinois is facing industry criticism for a proposed 0.2% tax on some digital assets.
According to the House Ways and Means Committee, lawmakers are scheduled to hear testimony Tuesday from representatives of Fidelity, Coinbase, Coin Center and New York University as Congress examines a package of tax measures that include key areas of the crypto industry.
The hearing comes amid a busy legislative week in Washington. House leaders are also trying to find enough support for a $70 billion funding package that cleared the Senate by a 52-47 vote last week and could reach the House floor as early as Tuesday.
The legislation would fund Immigration and Customs Enforcement and Customs and Border Protection for the remainder of President Donald Trump’s term.
Congress divides crypto tax proposals into targeted bills
Rather than advancing a comprehensive tax package, lawmakers split the provisions from the Digital Asset PARITY Act into seven independent deals.
The proposals address the taxation of stablecoin transactions, crypto mining and large rewards, digital asset lending, wash sale laws, charitable donations involving crypto, and taxpayer disclosure requirements.
Several lawmakers have previously introduced related legislation, including Senator Cynthia Lummis and Representatives Max Miller and Steven Horsford.
Support for the effort comes from many industry advocacy organizations. The Digital Chamber, the Blockchain Association and the Crypto Council for Innovation have welcomed the committee’s decision to move forward with the proposals.
The Digital Sovereignty Alliance described the move as one of the most significant developments in US crypto tax policy to date:
“Breaking the PARITY Act into seven separate articles on investment, mining, lending and laundromats gives lawmakers a clear way to get the information right rather than chasing an omnibus.”
Not everyone in the industry is fully compliant behind the package. Before the hearing, some market participants expressed concerns about certain provisions being discussed, although the details of those disputes were not made public.
At the federal level, tax negotiations are also on the rise. Illinois lawmakers are considering a $56 billion budget proposal that would apply a 0.2% tax on some digital goods.
Speaking to Crypto In America, Illinois Blockchain Association Executive Director Olta Andoni said the proposed 0.2% tax could make Illinois less attractive to crypto businesses, warning that the measure could encourage companies and investments to leave the state.
Separate calls for tax reform have come from industry figures such as Strive CEO Matthew Cole, who has advocated for the elimination of capital gains tax on Bitcoin transactions.
The Senate is working to finalize a draft of the DIFFERENT Act
While House lawmakers are focused on tax legislation, Senate committees continue discussions on the CLARITY Act, one of the most closely watched crypto market structure bills in Congress.
Current negotiations involve combining different versions of legislation developed by the Senate Banking Committee and the Senate Agriculture Committee. Lawmakers are also reviewing ethics provisions and potential amendments related to the GENIUS Act.
Providing an update on the process, Senator Cynthia Lummis said lawmakers are still working on several components before the legislation can go forward.
“We should wrap the Banking Committee bill with the Ag Committee bill, and the ethics provisions, with some changes in the Genius Act.”
Lummis added that he expects the CLARITY Act to reach the Senate floor before lawmakers leave Washington for the August recess, potentially setting up another major crypto policy vote later this year.
