DRAFT TEXT: Sen. Lummis to Introduce Crypto Tax Provisions in Big Beautiful Bill Amendment
Semafor first reported that Lummis would propose adding crypto language to the tax-and-spending bill last week.
Decrypting DC has obtained a draft amendment to the Big Beautiful Bill that, if added to the tax-and-spending legislation, would make several changes to how crypto transactions are taxed in the United States. The amendment could be introduced by Wyoming Republican Senator Cynthia Lummis in the coming weeks, according to two sources who have also reviewed the text.
Lummis told Semafor last week that she was pushing to add language addressing crypto taxation to the bill and had engaged with Senate Finance Chair Mike Crapo on the matter.
The draft text, attached below, includes several key tweaks. For example, it states that the income related to mining and staking activities should not be included in a tax payer’s gross income until the year of sale or disposition of those assets. It also includes carveouts for foreigners, excluding them from U.S. withholding taxes if they stake or trade assets through an American service provider or asset manager.
The eight-page text, which amounts to a sort of amalgamated wish list for crypto tax law, additionally proposes changes to tax law where it applies to crypto lending, airdrops, wash sales, and a mark-to-market election for dealers and traders. Perhaps most notable is language which describes a long-coveted de minimus rule that would eliminate taxes on the gains from crypto trades totaling less than $600. However, one source explained that the threshold could be lowered to $200, according to the conversations they’ve had with lobbying groups. Advocates for a de minimus rule say that without it, Americans are discouraged from using crypto for everyday transactions, because such transactions are each considered a taxable event.
Jason Schwartz, a tax partner at CahillNXT, said the language was “promising,” despite requiring technical clarifications, in a tweet thread posted Monday afternoon. “The bill represents an admirable effort to provide some clarity to the taxation of digital assets,” he tweeted.
It’s an understatement to say that the Big Beautiful Bill has been the subject of much controversy over the past month, resulting in clashes not just between Republicans and Democrats but also within the Republican Party and between Trump and key advisors, including Elon Musk. Crypto taxation is not considered a major issue in this context, and it is unlikely that Senate Majority Leader John Thune will be inclined to humor debate on the crypto tax amendments if they encounter significant pushback.
However, it’s possible that the amendment could get wrapped into a substitute text rather than see public debate on the floor. All of this should become clearer as the Senate works out its broader political strategy for passing the Big Beautiful Bill in the coming weeks.
