A trio of U.S. senators is proposing a legislative exclusion for crypto companies, including miners and software developers, from a tax reporting provision in a long-in-the-making bipartisan infrastructure bill.
The Wyden-Lummis-Toomey amendment, made public Wednesday, comes days after it first emerged that the trillion-dollar infrastructure bill included language aimed at tightening reporting requirements for "brokers" in the digital asset space. But critics quickly highlighted the vague language used in the provision, which they said could subject companies not involved in the actual brokerage of digital assets to overly burdensome regulation.
The push to amend the existing language won some key allies in the Senate in the days that followed, resulting in today's Senate amendment. Over the weekend, Ron Wyden, chairman of the Senate Finance Committee, wrote that the initial language was "an attempt to apply brick and mortar rules to the internet and fails to understand how the technology works."
Sen. Rob Portman, a leading author of the infrastructure bill, defended the provision on Thursday, writing on Twitter that "the legislation does not impose new reporting requirements on software developers, crypto miners, node operators or other non-brokers."
Still, The Wyden-Lummis-Toomey amendment enshrines that intent in the legislation itself.
As the text notes:
"Nothing in this section or the amendments made by this section shall be construed to create any inference that a person described in section 6045(c)(1)(D) of the Internal Revenue Code of 1986, as added by this section, includes any person solely engaged in the business of....validating distributed ledger transactions...selling hardware or software for which the sole function is to permit a person to control private keys which are used for accessing digital assets on a distributed ledger, or...developing digital assets or their corresponding protocols for use by other persons, provided that such other persons are not customers of the person developing such assets or protocols."
Crypto industry firms, including Coin Center, the Blockchain Association, Coinbase and Ribbit Capital published a joint statement of support on Wednesday, saying that the senators "are right that this language would place unworkable requirements on a nascent industry and we support their propose amendment to the provision."