A US senate has reportedly rejected the amendments introduced to the bipartisan US infrastructure bill and has asked to proceed towards the final vote without any amendments in the cryptocurrency tax provisions.
The ‘US Infrastructure Bill’ was one of the most significant policies introduced by US President Joe Biden that has a budget of $1 trillion. The bill would aim to renew the aging infrastructure in various parts of the country.
It has also been reported that the introduction of a stringent taxation system in the cryptocurrency area would lead to securing at least $28 billion that would contribute to the budget.
However, the provision related to virtual currency in the bill seeks to require disclosure of users and enforce stronger information reporting rules for tax purposes. However, crypto advocates have opposed the definition of ‘broker’ as written in the proposal. The bill describes a ‘Broker’ as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
The definition is broad in the sense that it would also include miners, developers, stakers, and others who do not have customers. Advocates argued that these ‘brokers’ do not have the ability to comply with the new tax rules.
In a compromise, U.S. Senators Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.) introduced an amendment that would exclude validators like miners and stakers from the Broker definition.
The amendment was supported by Treasury Secretary Janet Yellen. She said:
“I am grateful to Senators Warner, Portman, Sinema, Toomey and Lummis for working together on this amendment to provide clarity on important provisions in the bipartisan infrastructure deal that will make meaningful progress on tax evasion in the cryptocurrency market. I am also thankful to Chair Wyden for his leadership and engagement on these important issues.”
However, Sen. Richard Shelby, R-Al. objected to the bill and did not vote unanimously. Since the unanimous vote of the Senate is required to pass the compromised amendment, the bill would move forward without any amendments.
Critics have argued that without any amendments, crypto innovations would be restricted in the US and many crypto businesses would seek to move their operations overseas.