Sen. Portman Announces Support for Narrowed Crypto Tax Rule

CORRECTION (Aug. 6, 2021, 21:55 UTC): Sen. Rob Portman said he supports clarifying the language in the bill, but did not explicitly support the Wyden/Toomey/Lummis amendment.

U.S. Sen. Rob Portman (R-Ohio), one of the leaders of a bipartisan negotiation team that drafted a $1 trillion infrastructure bill, said he supports clarifying the tax reporting requirements on crypto businesses.

The original provision, which sought to raise about $28 billion from the industry, would have enforced wider information reporting rules on crypto brokers and broadened the definition of brokers to any entity that provides digital asset transfer services. Industry participants worried that the provision would include miners, node operators/validators, software developers and hardware manufacturers, among others, rather than just trading platforms like exchanges or over-the-counter trading desks that actually provide the transfer services.

Sens. Ron Wyden (D-Ore.), Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Penn.) proposed an amendment on Wednesday that would exempt the non-custodial business functions.

Portman – who previously defended the original provision and said it wouldn't affect companies like miners – tweeted his support for clarifying the language on Thursday, and called on the Senate to vote on the move.

However, the Joint Committee on Taxation (JCT), which projected the original $28 billion figure, reportedly said the amendment could knock about $5 billion off the actual amount of tax revenue generated.

It's unclear when the Senate might vote on the amendment. Senate Majority Leader Chuck Schumer (D-N.Y.) is looking to close up all amendments by Thursday and set up a vote on the actual bill by Saturday, Politico reported.

Should the Senate vote to advance the bill by next week, it would move to the House of Representatives for a vote this fall before. If the House passes the legislation, it would then be sent to President Biden's office to signed into law (or vetoed).