US House To Discuss Crypto Tax Reforms Amid CLARITY Act Momentum

In the current week, the U.S. House will return to the issue of crypto tax reform. This comes as Senate lawmakers are still hustling to get the CLARITY Act closer to a vote.

US House To Hold Hearing On Crypto Tax Legislation

The House Ways and Means Committee, the committee in charge of tax legislation, will conduct a hearing Tuesday with experts from Fidelity, Coinbase, Coin Center and New York University. Lawmakers will also consider seven discussion drafts that seek to overhaul U.S. digital asset taxation.

The crypto tax proposals carve up the larger Digital Asset PARITY Act that was passed in December by Reps. In addition to similar bills from Senator Cynthia Lummis, Max Miller, and Steven Horsford introduced comparable bills. The stand-alone drafts address transactions with stablecoins, crypto mining and staking, crypto lending, wash sale rules, charitable donations and taxpayer disclosures.

The move was welcomed by several large industry advocacy organizations, such as The Digital Chamber, The Blockchain Association and the Crypto Council for Innovation. According to the Digital Sovereignty Alliance, this is one of the largest moves in U.S. crypto tax policy in history.

“Breaking the PARITY Act into seven standalone drafts on staking, mining, lending, and wash sales gives lawmakers a clearer path to get the details right rather than rushing an omnibus,” the group said.

However, not all reactions have been positive. Behind the scenes, some industry folks are unhappy with certain aspects of the package ahead of Tuesday’s hearing.

The federal move coincides with Illinois planning a $56 billion state budget that would impose a 0.2% tax on some transactions involving digital assets. Industry groups say the measure could drive crypto companies and investment out of the state.

“I think the legislature, by adding this 20 basis point tax…is truly telling you to pack your bags and move,” said Olta Andoni, the executive director of the Illinois Blockchain Association, per Crypto In America.

Also, crypto stakeholders, including Strive CEO Matthew Cole have urged to eradicate Bitcoin capital gains tax.

CLARITY Act Discussions Continue

Meanwhile, the CLARITY Act talks in the Senate remain on-going. Lawmakers are continuing to merge the two versions of the bill in the Banking and Agriculture Committee, and discuss ethics provisions and changes related to the GENIUS Act.

“We have to wrap the Banking Committee bill with the Ag Committee’s bill, with the ethics provisions, with some changes to the Genius Act,” Lummis said.

Moreover, she expects the CLARITY Act to hit the Senate floor vote before August recess.