Reps. Horsford, Miller Unveil Discussion Draft to Bring Tax Clarity to Digital

WASHINGTON, D.C. – Congressman Steven Horsford (D-NV) and Congressman Max Miller (R-OH) today unveiled a bipartisan discussion draft to bring clarity, consistency, and common-sense guardrails to the taxation of digital asset activities. 

The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act targets unnecessary compliance challenges, closes major anti-abuse gaps, and aligns the taxation of digital assets with long-standing tax principles already applied to stocks, commodities, and other financial assets.

The discussion draft highlights a months-long bipartisan effort to identify practical solutions that eliminate excessive taxation on routine consumer transactions, address phantom income and valuation distortions, and establish clear rules before gaps in current law can be exploited at scale.

The lawmakers released the following statements:

“Like any emerging technology, cryptocurrencies need guardrails that allow innovation to grow while protecting consumers and the integrity of our tax system,” Rep. Horsford said. “Today, even the smallest crypto transaction can trigger tax calculation while other areas of the law lack clarity and invite abuse. Our discussion draft of the Digital Asset PARITY Act takes a targeted approach that provides an even playing field for consumers and businesses alike to benefit from this new form of payment.” 

“America’s tax code has failed to keep pace with modern financial technology,” Rep. Miller said. “This bipartisan legislation brings clarity, parity, fairness, and common sense to the taxation of digital assets. It protects consumers making everyday purchases, ensures the rules are clear for innovators and investors, and strengthens compliance so everyone plays by the same rules.”

Specifically, the Digital Asset PARITY Act would:

• Eliminate capital gains taxation on routine consumer purchases of up to $200 made with regulated, dollar-pegged payment stablecoins—treating digital dollars used like cash as cash, and reducing unnecessary compliance burdens for everyday transactions.
• Provide clear tax certainty for foreign investors trading on U.S. digital asset platforms.
• Extend established securities-lending tax principles to qualifying digital asset loans.
• Apply wash-sale rules to digital assets.
• Align the tax treatment of professional digital asset dealers and active traders with existing securities markets by permitting a mark-to-market election.
• Resolve the “phantom income” problem for miners and stakers by providing a clear, administrable election for when digital assets rewards are taxed.
• Modernize charitable contribution rules for digital assets.
• Apply constructive sale rules to digital assets.
• Clarify that passive, protocol-level staking by investment funds is not a trade or business.

Full text of the Digital Asset PARITY Act Discussion Draft is available here.

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