In a sigh of relief for crypto investors in the United States (US), prominent senators are introducing a bill, exempting taxes from transactions under $50.
Sen. Patrick Toomey (R-Pa.) joined with Kyrsten Sinema (D-Ariz.) in order to push the exemption from tax requirements for crypto users. This applies to users making small investments or purchases (under $50).
Previously, the Virtual Currency Tax Fairness Act introduced in the House of Representatives tried a similar enactment. The bipartisan group of U.S. House representatives had reintroduced a bill that would exempt consumers from paying taxes on crypto payments of less than $200. Senator Toomey said about the new bill:
“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way.”
With this new bill, people can “use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”
The Internal Revenue Service has held a firm crypto policy. According to them:
“When you sell virtual currency, you must recognize any capital gain or loss on the sale.”
Due to this, crypto use in the US as an alternative payment method has met some roadblocks. Jerry Brito, executive director of Coin Center, talked about this, saying:
“This would foster the use of crypto for retail payments, subscription services, and micro transactions. More importantly, it would foster the development of decentralized blockchain infrastructure generally because networks depend on small transaction fees that today saddle users with compliance friction.”