House GOP, Democrats Split on Crypto Tax Exemptions

Washington — Members of the House Ways & Means Committee debated six GOP-drafted crypto tax bills on Tuesday, with Republicans and Democrats sharply divided over exemptions for staking and mining rewards and rules for small crypto payments.

One bill would exempt staking and mining rewards from reportable income when tokens are received. Under current IRS guidance, staking rewards and newly mined crypto must be reported as ordinary income at the time a user receives the tokens. Another proposal would create a $10 de minimis exemption for crypto network transaction fees and treat dollar-pegged stablecoins as equivalent to cash for tax purposes, removing some reporting requirements on stablecoin transfers.

Republican lawmakers argued the changes would simplify tax compliance and support growth in the crypto industry. Industry witnesses urged broader relief, asking that the de minimis exemption cover all digital assets so routine purchases would not require capital gains calculations. Lawrence Zlatkin, Coinbase’s vice president of tax, told the panel consumers should not need an accountant to make small purchases with digital assets and used the example of buying clothes with Bitcoin.

Democrats raised concerns about allowing deferral of taxes on staking and mining rewards. Several members warned deferral could make crypto more favorable than taxable investments such as stocks and bonds. Representative Mike Thompson (D-Calif.) described the tax treatment of staking and mining as “a real sticking point” and said the parties may be at an impasse.

Republicans pushed to advance crypto bills before November’s midterm elections while their party controls both chambers and the White House. Democrats signaled a preference for a slower approach and broader bipartisan agreement. Representative John Larson (D-Conn.) warned about acting too quickly without enough information. Representative Richard Neal (D-Mass.), the committee’s top Democrat, told reporters he does not expect a bipartisan deal before the midterms.

Witnesses described routine tax burdens for consumers who use crypto for everyday transactions, saying current rules can require complex calculations for small sales. Lawmakers discussed the need to simplify reporting while guarding against tax avoidance and preserving parity with traditional financial instruments.

No final votes were taken at the hearing. The six proposals now face an uncertain path in Congress, with lawmakers and industry divided on whether to adopt exemptions for staking and mining and expanded de minimis rules in a standalone bill or as part of a broader legislative package.