The Blockchain Association has submitted its recommendations on how digital assets should be taxed in response to the Senate Committee on Finance's Request For Information. The association, which advocates for pro-innovation policies for the crypto community, sent a letter to the committee outlining its suggestions. The Senate Finance Committee had previously issued an open letter seeking guidance on how the Internal Revenue Code should be applied to digital assets, recognizing the regulatory challenges posed by their rapid emergence.
The Blockchain Association's recommendations aim to establish "symmetry" between the taxation of digital and non-digital assets, while acknowledging the unique characteristics of digital assets. The association also called for clarity for individuals earning income from mining or staking digital assets and proposed the establishment of a de minimis threshold to exempt certain gains and losses from tax reporting.
Additionally, the association provided input on two legislative proposals. It opposed the Digital Asset Mining Excise Tax (DAME Tax) included in President Biden's fiscal year 2024 budget and called for the passage of the Keep Innovation in America Act. The DAME Tax aims to address the economic and environmental costs associated with mining crypto assets, but the association expressed concerns about its potential impact on the industry.
The Keep Innovation in America Act, reintroduced by Chairman of the House Financial Services Committee Patrick McHenry, aims to fix the digital asset reporting requirements included in the Infrastructure Investment and Jobs Act. The legislation seeks to ensure that the United States remains a leader in the global financial system and harnesses the potential benefits of the digital asset ecosystem.
