U.S. Senator Lummis Introduces Bill to Exempt Small Bitcoin Transactions from Taxation and Prevent Double Taxation on Mining

U.S. Republican Senator Cynthia Lummis has introduced a new bill to establish a tax exemption threshold for small Bitcoin (BTC) payments and to resolve double taxation on mining and staking.

According to cryptocurrency-focused media outlet Atlas21 on the 4th (local time), Senator Lummis explained the purpose of the newly submitted tax reform bill, stating, "We need to fix the outdated tax system that does not fit the digital economy era."

One of the bill’s key points is to introduce a small-amount tax exemption threshold for transactions in virtual assets such as Bitcoin. Single transactions of $300 or less are excluded from taxation, and the annual exemption cap is set at $5,000. From 2026, the limits are adjusted for inflation. Senator Lummis noted, "Taxing even transactions like buying a cup of coffee with Bitcoin is out of touch with reality."

Another provision changes the taxation point for mining and staking income to the 'time of sale.' The current method taxes at the time coins are received through mining or staking, but the bill changes this to the point of sale or exchange.

Senator Lummis stated, "Current tax law discourages Americans from participating in the digital economy," adding, "This bill is meant to foster innovation and prevent accidental taxpayer over-taxation."