US Senators Introduce Legislation to Limit ‘Broker’ Definition in Infrastructure Bill Signed by President Biden
On Monday, President Joe Biden signed the $1 trillion infrastructure bill that contains the controversial over-reaching cryptocurrency tax definition.
The bill-signing ceremony was held on the White House South Lawn, where members of both parties came as a bipartisan show of support for the new legislation. The measure is designed to create jobs by dispersing billions of dollars to state and local governments.
When it comes to the much-debated crypto taxation section of the bill, it includes a new definition of the term “broker” to include entities like miners, validators, and developers, which saw a high-profile battle in the Senate as crypto supporters called for an amendment.
While an amendment that would have softened the definition gained support and almost unanimous consent, save for just one senator, Richard Shelby, who stopped it from being passed.
The much-publicized battle gave a big boost to crypto’s visibility on Capitol Hill, but the open-ended language never changed and is now in the Treasury Department's hands. This has resulted in crypto advocates and companies joining forces like Jack Dorsey’s Square and Coinbase to amend the existing language in the infrastructure plan.
At the time, the Treasury was in support of the amendment, and unnamed officials have said several times in interviews that it would not include miners and node operators as brokers. But the rules are subject to change from the regulator, which will then be opened for public response.
On Monday, as the bipartisan team of US senators introduced the bill, Senator Cynthia Lummis, a Wyoming Republican, along with Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, introduced new legislation that limits the definition of the broker.
Ron Wyden Senate Finance Committee Chairman
“Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets.”
“This will protect American innovation while at the same time ensuring those who buy and sell cryptocurrency pay the taxes they already owe.”
The legislation addresses new tax-reporting requirements for digital currencies that will force some cryptocurrency companies that provide a service “effectuating” the transfer of digital assets to report information on their users to be tax compliant.
Cynthia Lummis Wyoming Republican Senator
“Digital assets are here to stay in our financial system, and the decisions we make now will have impacts far into the future.”
“We need to be fostering innovation, not stifling it.”
It's not yet clear when the crypto reporting bill, which includes a provision that would make it retroactive to the infrastructure bill’s signing, could come up for a vote.
The Joint Committee on Taxation estimates crypto taxation would raise about $28 billion over a decade.