The crypto industry appears to have another proponent in the United States Congress, as Congressman (R-NC) Ted Budd recently testified to the House of Representatives Ways and Means Committee on the current tax laws on cryptocurrencies.
As per the video of his testimony seen below, Budd highlighted that the current taxation on cryptocurrencies is flawed, stating that the digital assets should have a de minimis tax exemption like foreign currencies.
The Cryptocurrency Tax Fairness Act
Budd is a co-sponsor of bill H.R.3708, the “Cryptocurrency Tax Fairness Act,” which is a proposed bill that sets out to treat personal cryptocurrency purchases like personal transactions in foreign currency, which is not a taxable event.
Budd proclaimed that if Congress does not change the current cryptocurrency tax laws, the blockchain industry’s biggest innovators will leave the United States for business opportunities elsewhere.
Explaining his case, he highlighted the issues of double taxation that cryptocurrencies endure. The IRS views crypto as property, and therefore treats the transaction for the buyer as both a sale and a purchase. Budd believes this is unfair for taxpayers on both a record-keeping and money standpoint.
Crypto Purchases Should Be Treated as Ordinary Purchases
Budd also cited bill H.R.7361, or the “Virtual Value Tax Fix of 2018” bill, which would allow purchases with crypto to be treated the same as ordinary purchases in the eyes of the IRS. Without some kind of solution, Budd proclaimed that blockchain transactions are subject to almost a 40% sales tax.
All in all, the crypto industry appears to have some people in Congress on its side, as they fight to establish fair and clear tax laws for cryptocurrencies.
Will positive tax laws for digital assets in the United States be established this year? Let us know what you think in the comment section below.