An analysis found that if the United States exempts personal cryptocurrency payments of $300 or less from capital gains taxation, net federal tax revenue could increase by approximately $859 million over the next 10 years.
The Cornell Brooks School Institute for Technology Policy estimated the net tax revenue impact at between $172 million and $2.58 billion in a report analyzing the small digital-asset payment tax exemption provision in bill S.2207, assuming the current base of approximately 5.4 million digital-asset payment users remains unchanged. Under the central scenario, tax revenue was expected to increase by approximately $859 million over 10 years.
S.2207 provides that gains and losses from digital-asset transactions of $300 or less made by individuals to purchase goods or services would be excluded from taxation. The additional exemption would not apply if cumulative annual gains from such transactions exceed $5,000.
The institute said current capital gains taxes and the reporting burden for small transactions are discouraging the everyday use of cryptocurrencies for payments. It analyzed that reducing these burdens could increase payment activity itself, offsetting the resulting loss in tax revenue.