US Congressman Steve Stockman of Texas is preparing to introduce a new bill, the ‘Virtual Currency Tax Reform Act’, which, if passed, would tax bitcoins as currency instead of property.
Currently, the US Internal Revenue Service (IRS) views bitcoin and other digital currencies as property. When someone sells their bitcoin or makes a purchase in bitcoin, they are subject to a 15% capital gains tax. Any wages paid out in digital currencies must also be reported to federal tax authorities.
(Readers can learn more about the IRS decision here.)
Stockman’s proposal recognizes bitcoin and other digital currencies as legal tender. Instead of triggering capital gains taxes for each transaction, purchases made with bitcoins would require sales taxes instead.
In a brief statement, Stockman said that policies regarding bitcoin should be aimed at spurring innovation, rather than imposing restrictive levies:
“This is a nascent industry. Along with 3D printers and nanotubes, cryptocurrency is the future. We need to encourage it, not discourage it. There is risk associated with every budding industry in America.”
When reached for comment, Stockman’s office said that more information regarding the bill is forthcoming, and that a public version has not yet been released.
According to an official press release, Stockman is expected to comment on the bill during an 8th April meeting at the New York City Bitcoin Center.
Earlier this year, Stockman made headlines by accepting bitcoin-denominated campaign donations in his race for US Senate.
US Congressional interest in bitcoin grows
Stockman’s legislation would constitute one of the first major efforts by Congress to regulate bitcoin usage in the United States. Since late last year, Congress has shown an increasing level of interest in the oversight and regulation of digital currencies.
Earlier this month, the US House of Representatives Committee On Small Business held a hearing which included testimony from George Mason University’s Jerry Brito and market expert Mark T. Williams.
On a less serious note, Colorado Congressman Jared Polis responded to calls to ban bitcoin with his own proposal to ban the US dollar.
Washington DC image via Shutterstock