WASHINGTON—The House Ways and Means Committee has advanced bipartisan legislation that would establish new federal tax rules for cryptocurrencies and other digital assets, including provisions intended to make it easier to use cryptocurrency and stablecoins for everyday transactions.
The committee voted 38-5 to send the Digital Asset Tax Certainty Act, H.R. 10357, to the full House, according to committee records. The measure was ordered favorably reported as amended, with five lawmakers voting against it.
The legislation would clarify the tax treatment of digital assets, streamline some reporting requirements and apply several tax rules already governing traditional financial assets to cryptocurrencies.
Rep. Rudy Yakym (R-IN) said following the vote that the legislation would give cryptocurrency owners clearer guidelines and treat digital assets more like other financial assets.
House Ways and Means Committee Chairman Jason Smith (R-MO) described the legislation as the product of more than a year of bipartisan work on digital asset taxation.
‘Historic Moment’
“This is a historic moment for this Committee,” Smith said in opening remarks before the markup, adding that Republican and Democratic lawmakers had worked together on what he called the first tax framework for digital assets.
The committee said the bill would remove some tax barriers to using digital assets as a medium of exchange, provide parity between digital assets and comparable traditional financial assets, apply existing anti-abuse rules to digital assets and clarify the tax treatment of cryptocurrency mining and staking.
The Wall Street Journal reported the measure would provide tax exemptions for certain fees associated with disposing of digital assets and establish rules designed to make cryptocurrency and stablecoins easier to use for consumer transactions.
The legislation also would address the taxation of mining and staking rewards and extend so-called wash-sale rules to digital assets. Those rules generally prevent investors from claiming tax losses when they sell an asset at a loss and quickly acquire a substantially similar asset.
Additional Provisions
Other provisions would allow digital asset dealers and traders to use mark-to-market accounting and provide certain digital asset charitable contributions with tax treatment similar to publicly traded securities. The measure also directs the Treasury Department to create a voluntary disclosure program for digital assets that would offer reduced penalties to qualifying taxpayers.
Smith said the legislation is intended to bring “clarity, parity and workability” to digital asset taxation. The committee said the bill would be the first federal law addressing the substantive tax treatment of cryptocurrencies and other digital assets if enacted.
The bill’s path through Congress remains uncertain.
The Wall Street Journal reported the legislation could be considered during the post-election session, but it is unclear when — or whether — the full House and Senate will take it up.
Follows Failure of CLARITY Act to Move
As the CU Daily reported, the bill’s advancement also comes one day after a separate effort to establish a broader federal regulatory framework for digital assets suffered a setback in the Senate. A procedural vote on the CLARITY Act failed 49-50 Tuesday, short of the 60 votes required to advance the legislation.
Alison Mangiero, chief strategy officer and head of U.S. policy at the Crypto Council for Innovation, called the Ways and Means vote a milestone for digital asset legislation and said the organization plans to continue working with lawmakers and committee staff as the legislation moves forward.
