US lawmakers call for change in corporate digital asset taxes

US Senators Cynthia Lummis and Bernie Moreno are urging Treasury Secretary Scott Bessent to revise a tax provision impacting corporate digital asset holdings. Their May 12th letter proposes amending the definition of “adjusted financial statement income” under existing US law, potentially lowering tax burdens on digital asset companies. This adjustment aims to mitigate the effects of a provision within the 2022 Inflation Reduction Act.

Senator Lummis highlighted the competitive risk to US companies facing higher taxes than their foreign counterparts in a subsequent X post. The senators argue that their proposed modification would offer relief to corporations investing in digital assets. The Inflation Reduction Act, effective in 2023, mandates a 15% minimum tax on companies reporting over $1 billion in profits for three consecutive years. This measure’s inclusion of unrealized crypto gains and losses prompted Lummis and Moreno’s call for swift Treasury Department action.

Senator Lummis’ advocacy for the digital asset sector is well-established, while Senator Moreno’s recent election benefited significantly from crypto-backed political action committees. This situation underscores the growing influence of the cryptocurrency industry in US politics.

Simultaneously, the Senate is poised to reconsider the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, legislation designed to regulate payment stablecoins. A previous vote failed on May 8th due to Democratic concerns about Donald Trump’s connections to the crypto industry. Despite this setback, Senator Lummis, a co-sponsor of the GENIUS Act, expressed continued support for digital asset regulation, indicating a potential for renewed Senate consideration in the near future. The interplay between these legislative efforts reflects the ongoing debate surrounding the taxation and regulation of digital assets within the United States. The outcome will significantly impact the future of the US digital asset landscape and its global competitiveness.