Bitcoin Tax Exemptions May Be Coming After All—In New Senate Bill

Crypto tax exemptions failed to make it into President Donald Trump’s “Big, Beautiful Bill” earlier this week—but the perks may soon be headed back to the Senate floor, in the form of standalone legislation.

On Thursday, Sen. Cynthia Lummis (R-WY), who had pushed unsuccessfully to include crypto tax perks in Congress’ sweeping reconciliation bill, introduced comprehensive digital asset tax legislation that the senator promised would secure “key victories for the digital asset industry and create a level playing field for digital asset users across the country.”

“In order to maintain our competitive edge, we must change our tax code to embrace our digital economy, not burden digital asset users,” Lummis said today in a statement shared with Decrypt. “We cannot allow our archaic tax policies to stifle American innovation, and my legislation ensures Americans can participate in the digital economy without inadvertent tax violations.”

The bill, thus far referred to only as the Lummis Crypto Tax Bill, would fulfill many of the wish list tax item crypto policy leaders had hoped might make it into the “Big, Beautiful Bill” on Monday.

Chief among them: a $300 de minimis tax exemption for most digital asset transactions, which would allow crypto users in the United States to make everyday purchases with all manner of tokens without having to calculate and pay capital gains taxes. 

Under the new rule, crypto transactions under $300—say, buying a burger with Bitcoin, or spending a small amount of Ethereum for gas fees—would be exempt from capital gains reporting requirements. There would be a $5,000 yearly cap on the exemption, however, which would not apply to purchase of cash or cash equivalents including stablecoins, property used in active business, or property held for income production. 

Crypto advocates have long said such an exemption could accelerate crypto’s mainstream adoption as a payment method. 

The Lummis bill would also codify other tax perks hoped for earlier in the week, such as a mark-to-market election allowing businesses to more easily report unrealized crypto gains on their balance sheets, and a crypto mining rule that would clarify that rewards earned through crypto mining or staking should only be taxed when sold off, as ordinary income. In recent years, legal disputes have arisen over whether staking rewards should be considered taxable income at the moment of their generation. 

Additional tax perks in the legislation include an expansion of existing securities lending rules to include digital assets; the clarification would make crypto lending a non-taxable event, similar to securities lending. Another would make it simpler to donate crypto to charitable causes.

A spokesperson for Sen. Lummis told Decrypt that an exact timeline for introducing the legislation on the Senate floor has not yet been determined. Last month, the chamber passed the GENIUS Act, a bill establishing a framework for issuing and trading stablecoins in the United States. It is expected to see a vote in the House in the coming weeks.