A report from the Cornell Brooks School Tech Policy Institute, or BTPI, says the United States could see higher federal net revenue if it adopts a de minimis exemption for Bitcoin and other crypto payments below $300. Under the report’s assumptions, federal net revenue would increase by an estimated $859 million over 10 years, with a range of $172 million to $2.58 billion, while the number of digital asset payment users stays flat at 5.4 million.
The report comes as lawmakers continue to debate how small crypto transactions should be taxed. Senator Cynthia Lummis’s S. 2207 bill would exempt eligible payments from capital gains tax, with an annual cap of $5,000 in tax-free capital gains. Other legislative proposals would limit the exemption to regulated stablecoins.
BTPI said current capital gains rules and reporting requirements for small transactions hold back everyday Bitcoin payments. It added that removing transaction-level tax and reporting burdens could lift Bitcoin payment activity and demand. At current adoption levels, though, the near-term effect on Bitcoin prices and tax receipts may be limited, while the longer-term outcome would depend on the scale of payment usage.
A report from the Cornell Brooks School Tech Policy Institute (BTPI) says the U.S. could increase federal net revenue over a 10-year period if it adopts a de minimis exemption for Bitcoin and other cryptocurrency payments below $300. Based on the report’s assumptions, federal net revenue would rise by an estimated $859 million, with a projected range of $172 million to $2.58 billion, assuming the number of digital asset payment users remains unchanged at 5.4 million.
Tax proposal and legislative debate
The report was cited alongside Senator Cynthia Lummis’s S. 2207 bill, which would exempt eligible payments from capital gains tax. The proposal sets an annual ceiling of $5,000 in tax-free capital gains. Other legislative initiatives would narrow the exemption so that it applies only to regulated stablecoins, and discussion on that approach is still ongoing.
BTPI’s view on current tax rules
BTPI said existing capital gains taxes and reporting requirements for small transactions are holding back the use of Bitcoin for everyday payments. The institute said removing transaction-level tax and reporting burdens could increase Bitcoin payment activity and demand. It also said that at current adoption levels, the near-term impact on Bitcoin’s price and tax revenue may be small, while the long-term effect would depend on factors including the scale of payment usage.
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