A group of crypto lobbying organizations has urged Congress to pass a bill on crypto staking and mining taxes without changes, saying it would provide clarity on crypto rewards taxes and ensure blockchains “can be secured by Americans in America.”
The Blockchain Association, the Crypto Council for Innovation and The Digital Chamber said in a letter on Sunday to House Ways and Means Committee Chair Jason Smith and its top Democrat, Richard Neal, that the Tax Clarity for Mining and Staking Act should be passed “as introduced.”
“After years of uncertainty about how mining and staking rewards are taxed, the bill provides a durable compromise that innovators can support while addressing concerns raised by some lawmakers,” the group wrote.
The bill seeks to address what the crypto industry has long said is an unfair tax code that views mining and staking rewards as taxable income when received, which the letter argued is a “taxation of phantom income” that can cause liquidity issues.
The bill would allow miners and stakers the choice of paying taxes on crypto rewards either when they receive them or when they sell the assets, which the lobbyists wrote “ensures income is recognized while avoiding immediate taxation before taxpayers can monetize the asset.”
It was introduced earlier this month ahead of a legislative hearing, but has not advanced past the Ways and Means Committee. Democratic Representative Steven Horsford filed an amendment to limit the deferral of crypto reward taxes to five years.
Crypto Council for Innovation CEO Ji Hun Kim posted to X on Monday that Horsford’s amendment would “break” the bill and raise “negligible revenue.”
“We greatly appreciate his engagement, but there have already been significant concessions made in framing this as an election,” he added.
Source: Ji Hun Kim
The bill has seen pushback from the banking lobby, with the American Bankers Association earlier this month saying it would give “a significant advantage over nearly every other way Americans save, invest and earn returns today.”
Related: Illinois governor approves crypto transaction tax despite industry uproar
“When a company pays a dividend, shareholders receive the value of the dividend and pay tax that year,” the ABA said. “The Tax Clarity for Mining and Staking Act, would work very differently — and show clear favoritism for cryptocurrencies over other asset classes.”
The crypto lobby argued that renegotiating any agreed-upon compromise in the bill “would risk reviving the very problems the bill resolves and stalling a bipartisan result that is finally within reach.”
The bill adds to another crypto tax-focused bill before Congress, the so-called PARITY Act, which was introduced in May and directs the Internal Revenue Service to study what exemptions it can give for small crypto transactions.
The crypto industry has called on Congress to exempt small crypto transactions from tax. Kraken said in April that it sent 56 million tax forms to the Internal Revenue Service, where nearly a third were for transactions worth less than $1, while over 75% were for transactions less than $50.
Magazine: Crypto scammers face death, Aussie CGT makes Asian hubs attractive: Asia Express
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.