Proposed Digital Asset Tax Legislation
Summary
SIFMA provided comments to the House Committee on Ways and Means on proposed digital asset tax legislation, supporting clear and consistent tax rules that ensure a level playing field between digital assets and traditional investments.
Excerpt
The Securities Industry and Financial Markets Association (SIFMA) 1 and its member firms commend your efforts toward developing legislation to provide clear and consistent taxation of digital assets. SIFMA shares your goal of creating much-needed tax rules for investments in digital assets and governing the taxation of digital asset transactions that largely mirror, with the addition of critical definitions and other rules, the tax treatment that has applied to trading of stocks, securities, and commodities. Importantly, digital asset tax legislation should ensure a level playing field for digital assets compared to more traditional investment vehicles and we believe H.R. 10357 as currently constructed largely achieves that goal—a core principle for SIFMA members is that digital assets not be treated in any way preferentially under the Tax Code compared to stocks, securities, and commodities.
Legislation addressing wash sales, securities lending, mark-to-market of certain digital assets, a trading safe harbor for digital assets, as well as clear rules for assessing when tax withholding is necessary on certain payments to foreign investors are important SIFMA priorities, and so we are pleased that the legislation before the Committee addresses those priorities. Also of vital importance is that legislation before the Committee addresses more unique aspects of digital assets for which the tax law is unclear, particularly relating to the tax treatment of staking rewards in various contexts, including exchange traded products. Clarity is of the greatest importance now as the market for various forms of digital assets, including those held in exchange traded products and retirement accounts, is developing rapidly.
- SIFMA is the leading trade association for broker-dealers, investment banks, and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly one million employees, we advocate for legislation, regulation, and business policy affecting retail and institutional investors, equity and fixed income markets, and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. With offices in New York and Washington, D.C., SIFMA is the U.S. regional member of the Global Financial Markets Association (GFMA).