Senator Lummis’ New Bill Enables Tax-Exempt Bitcoin Spending — But Thresholds Are Too Low

Senator Lummis’ New Bill Proposes Tax-Exempt Bitcoin Spending, But Critics Say Thresholds Are Too Low

Senator Lummis has introduced a new bill that would allow U.S. citizens to spend up to $300 worth of bitcoin on goods and services annually without having to pay capital gains taxes on the transactions. There is a yearly cap of $5,000, and the threshold for spending will be adjusted for inflation starting in 2026.

This legislation was initially conceived as an amendment to the One Big Beautiful Bill (OBBB) but was not included. After Senate Finance Committee Chairman Mike Crapo did not put Senator Lummis’ amendment up for a vote, she decided to work on separate legislation regarding tax reform for bitcoin spending.

The bill released by Senator Lummis has received mixed reviews, with some critics saying the spending thresholds are too low. Trey Walsh of The Progressive Bitcoiner believes there should be no cap for goods and services and that consumers should not be taxed on their bitcoin spending. Zach Herbert of Foundation Devices simply stated, “this is so weak,” expressing his disappointment with the bill.

Policy Analyst Nick Anthony suggested dropping the spending caps altogether and focusing on qualifying purchases for goods and services. He believes the $300 transaction cap and $5,000 annual spending cap are disappointing.

Personally, I believe that while spending caps are acceptable, they should be higher. I would like to see the de minimis exemption applied to transactions valued at up to $600 and the yearly threshold closer to $25,000. Many others in the Bitcoin community share this sentiment, calling for more substantial provisions in the bill.

If you agree with these points, consider joining us in respectfully advocating for Senator Lummis to increase the spending thresholds in the bill. Despite the criticisms, it is important to acknowledge and appreciate Senator Lummis’ dedication to crafting legislation that recognizes bitcoin as a legitimate medium of exchange.

This article presents a perspective on the proposed bill and the opinions expressed are solely those of the author. It does not necessarily reflect the views of BTC Inc or Bitcoin Magazine.