Blockchain Legal Resource

On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (the “Infrastructure Bill”), which significantly expands tax information reporting for certain cryptocurrency transactions. The Infrastructure Bill includes an information reporting requirement for cryptocurrency asset exchanges and custodians on an IRS Form 1099, and an information reporting requirement for certain persons who accept large payments in cryptocurrency in such person’s trade or business on an IRS Form 8300. The effective date of these changes will apply to any information return required to be filed after December 31, 2023.

On May 28, 2021, President Biden released some of the legislative items that would be added by his American Families Plan, which includes a provision that could impact tax information reporting for cryptocurrency asset exchanges and custodians. If enacted, this proposal could require substantial effort to implement and administer.

Only a few states have issued guidance on the sales tax treatment of digital currency transactions. On November 2, 2020, Kansas joined this group, with Notice 20-04, Sales Tax Requirements Concerning Digital Currency Under the Retailers’ Sales and Compensating Tax Acts (the “Notice”), issued by the Kansas Department of Revenue (the “Department”).