New Infrastructure Bill Looks to Raise $30B Through Crypto Taxes
The draft language could mean a number of individuals interacting with crypto may have to start reporting their transactions.
A bipartisan infrastructure bill in Congress proposes to raise $28 billion from crypto investors by applying new information reporting requirements to exchanges and other parties.
According to a draft copy of the bill shared with CoinDesk, any broker that transfers any digital assets would need to file a return under a modified information reporting regime. The draft defined digital assets as “any digital representation of value … recorded on a cryptographically secured distributed ledger” or related technology. It also includes decentralized exchanges and peer-to-peer marketplaces in its definition of brokers.
A separate summary of the bill further clarified that cryptocurrencies are treated as a subsection of the broader digital asset umbrella.
“The provision includes updating the definition of broker to reflect the realities of how digital assets are acquired and traded,” the document said. “The provision further makes clear that broker-to-broker reporting applies to all transfers of covered securities within the meaning of section 6045(g)(3), including digital assets.”
This could bring up to $30 billion into the bill’s “pay-fors,” according to a fact sheet also shared with CoinDesk.
"Additionally, digital assets are added to the current rules requiring businesses to report cash payments over $10,000," the fact sheet said.
The crypto reporting requirements are among a list of 14 new "pay-fors" included in the bill, which also includes repurposing COVID-19 relief funds, auctions, Superfund fees, fuel sales and other sources of revenue.
Kristin Smith, executive director of the Blockchain Association, told CoinDesk the draft language could mean a number of individuals interacting with crypto may have to start reporting their transactions.
“We interpret this to mean software wallet developers, hardware wallet manufacturers, multisig service providers, liquidity providers, DAO token holders and potentially even miners,” she said.
The $1 trillion infrastructure bill also includes provisions for funding public transit, particularly passenger rail; investments in bridges, clean drinking water and wastewater infrastructure; and high-speed internet access for all Americans, among other provisions, according to a White House fact sheet.
The U.S. Senate may conduct a test vote as early as Wednesday, Senate Majority Leader Chuck Schumer (D-N.Y.) said.
In a statement, U.S. President Joe Biden praised the team that negotiated the bill, saying neither side got 100% of what it wanted.
“Everyone from unions to business leaders and economists left, right and center believe the public investments in this deal will mean more jobs, higher productivity, and higher growth for our economy over the long term. Experts believe that the majority of the deal’s benefits will flow to working families,” he said in a statement.
A previous Biden budget proposal also includes new crypto reporting requirements.
UPDATE (July 28, 2021, 22:05 UTC): Updated with additional information.
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