Two bipartisan US legislators have introduced a bill to clarify that staking rewards should only be taxed when they are sold, with the aim of avoiding double taxation. Representatives Wiley Nickel, Democrat of North Carolina, and Drew Ferguson, Republican of Georgia, introduced the bill on Tuesday, dubbed the "Providing Tax Clarity for Digital Assets Act".
"The United States' treatment of digital asset rewards is overly complex, causing investor confusion, double taxation, and US companies moving overseas," said Representative Ferguson. "The Providing Tax Clarity for Digital Assets Act would bring much-needed tax clarity to the industry, establish U.S. leadership in the tax treatment of digital assets, and encourage innovation and business in the United States."
The new bill would require that taxes on blockchain rewards from proof-of-work or proof-of-stake networks not apply when they are acquired, but rather when they are spent or sold, Coin Center said in an article on Wednesday. "This simple policy would solve the major problems with taxing cryptocurrencies today and level the playing field for the technology," Coin Center said.
The Proof of Stake alliance called the bill a "common sense clarification of existing law" in a post on Tuesday. "The bill promotes tax fairness and compliance by confirming that blockchain rewards are taxed only when sold or redeemed, rather than taxed twice, first when acquired and then again upon disposition," POSA said.
Representative Nickel has supported cryptocurrencies and pushed to advance digital asset legislation called the Financial Innovation and Technology Act last year. He and Representative Ferguson have announced their retirement and that they will not seek re-election.
