SKN | U.S. House Advances Crypto Tax Bill After CLARITY Act Setback

Key Points:

• The House Ways and Means Committee approved the Digital Asset Tax Certainty Act 38-5, advancing the measure toward consideration by the full House.
• The bill would establish a $10 de minimis threshold for qualifying crypto network and transaction fees while extending several existing tax rules to digital assets.
• The legislation provides a separate regulatory path for crypto taxation after the CLARITY Act failed to advance in the Senate, although significant legislative steps remain before the tax framework could become law.

House Advances Crypto Tax Framework as CLARITY Act Stalls

The U.S. House Ways and Means Committee has advanced a major cryptocurrency tax bill less than 24 hours after the Senate failed to move forward with the broader CLARITY Act. The 38-5 committee vote on the Digital Asset Tax Certainty Act signals bipartisan support for establishing clearer federal tax treatment for digital assets, even as the broader U.S. crypto market-structure debate remains unresolved.

The timing is significant for crypto investors and institutions because taxation represents a separate component of regulatory uncertainty. While the CLARITY Act focused primarily on market structure and regulatory jurisdiction, the House bill addresses how digital assets are treated under the Internal Revenue Code.

$10 Threshold Targets Everyday Crypto Payments

One of the bill’s most notable provisions establishes a $10 threshold for qualifying network and transaction fees. Under the proposal, certain small fees paid with digital assets would not automatically create a taxable gain or loss, addressing an accounting problem that can arise when users spend crypto for routine transactions.

The threshold is relatively narrow compared with earlier proposals, but its practical importance could be greater if digital assets become more widely used for payments. The legislation also contains special treatment for qualifying U.S. dollar stablecoins, potentially simplifying transactions involving digital assets designed to maintain a stable value against the dollar.

The provision is also structured with limitations. The $10 fee treatment would not apply to service providers conducting transactions on behalf of others, and the relevant provision would not take effect until December 2027 if the legislation becomes law.

Crypto Tax Rules Move Closer to Traditional Finance

The legislation goes considerably beyond small payments. It would extend wash-sale rules to traded digital assets, bringing them closer to the tax treatment applied to stocks and securities. It also addresses constructive sales, lending transactions, charitable contributions, broker reporting and the treatment of digital assets within investment structures.

Mining and staking would generally remain subject to ordinary-income treatment under the current version. However, the bill does not resolve the precise timing question for recognizing mining and staking rewards as income. That unresolved issue remains particularly relevant for institutional operators because tax liability can arise before a digital asset is converted into cash.

Bipartisan Support Faces a Narrow Legislative Window

The 38-5 vote demonstrates substantially broader committee support than the CLARITY Act received in the Senate, but the bill still faces several legislative stages. It must pass the full House, clear the Senate and receive presidential approval before becoming law.

The political environment remains complicated. Some lawmakers have questioned whether the legislation provides excessive benefits to the crypto industry, while concerns surrounding President Donald Trump’s financial connections to digital assets have also become part of the congressional debate. These objections could influence negotiations even though the tax bill itself has attracted bipartisan committee support.

What Crypto Investors Are Watching Next

The immediate focus is whether the Digital Asset Tax Certainty Act can move beyond committee approval before Congress leaves Washington for its pre-election recess. The House is expected to have only about five weeks of scheduled legislative work between the November elections and the beginning of the next congressional session. Meanwhile, Bitcoin was trading around $76,000 and Ethereum near $2,400, keeping regulatory developments relevant to a market already adjusting to higher U.S. interest rates. The Senate Finance Committee’s response and any changes to the House text will be important indicators of whether tax clarity can advance independently of the stalled market-structure legislation.