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Several prominent cryptocurrency companies and backers, including venture capital firm Andreessen Horowitz, payments company Square and industry group Blockchain Association, are throwing their support behind an amendment to the $1 trillion infrastructure bill that aims to clarify a provision related to taxing cryptocurrency transactions.
The bipartisan amendment, filed Wednesday by Sens. Ron Wyden, Cynthia Lummis and Pat Toomey, would narrow language in the bill related to cryptocurrency “brokers” so that it includes only people who “conduct transactions on exchanges where consumers buy, sell and trade digital assets” and doesn’t require the reporting of information for other activities, such as mining, developing blockchain tech or building hardware wallets.
“We share the Senators’ concern that the existing provision regarding the taxation of cryptocurrency transactions is overly broad and will sweep in non-intermediaries, such as network validators and software developers, and would stifle innovation by imposing what would be an unworkable reporting requirement on these groups,” reads a letter to Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell from Marc Andreessen, Ben Horowitz and other partners of the venture capital firm. They add that the amendment is the “right solution to address these concerns in a simple way.”
The crypto tax provisions emerged in the infrastructure bill as a way to offset $28 billion of the package’s roughly $550 billion in new spending on roads, bridges and other infrastructure projects, according to Roll Call. The bill lines up with previous proposed changes from the US Treasury, calling for transactions involving more than $10,000 in cryptocurrency to be reported to the IRS. This is the same reporting threshold for cash deposits.
“Our amendment makes clear that reporting does not apply to individuals developing block chain technology and wallets,” said Wyden in a release. “This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.”
The infrastructure bill could be voted on as early as this week depending on the debate over amendments in the Senate. If passed, it’ll move to the House of Representatives for additional amendments.