Virginia Senate Bill Aims to Regulate, Tax Digital Assets

Virginia senate is considering Senate Bill No. 339 proposed by a Senator which aims to regulate the mining and exchange of digital assets.

Virginia senate has proposed a piece of legislation that will establish restrictions for the mining and exchange of digital assets, as well as the treatment of these assets under regulations governing taxes.

Senator Saddam Azlan Salim, the youngest member of the legislative body at the age of 34, made the proposal for Senate Bill No. 339 on January 9. If the Virginia Senate approves the measure, it will be sent to the House of Delegates for review, and then signed into law.

The virginia Senate is now discussing the legislation. The bill exempts people or businesses engaged in digital mining activities from obtaining money transmitter licenses.

“No license under this chapter shall be required of any person engaging in home digital asset 37 mining, digital asset mining, or digital asset mining business activities, as those terms are defined in § 38 15.2-2288.9.”

An additional benefit is that it protects miners from discrimination by preventing industrial zones from restricting the mining of digital assets or enforcing noise laws that are more stringent than those that are already in place in industrial zones.

In addition, if certain circumstances are met, the legislation allows issuers and dealers of digital assets to be exempt from the requirements for registering securities.

“An issuer or seller of a digital asset shall be exempt from the securities registration requirements of this chapter if (i) the digital asset cannot be considered an investment contract, (ii) the issuer or seller of the digital asset did not market the digital asset to the initial buyer as a financial investment, and (iii) the issuer or seller of the digital asset takes other reasonable precautions to prevent an initial buyer from purchasing the digital asset as a financial investment.”

One condition is that the digital asset cannot be classified as an investment contract. The law can’t classify as “financial investment” businesses that provide mining or staking services.

However, to be eligible for the exemption, they need to submit a notice. In addition, the legislation provides tax advantages, which encourage the usage of cryptocurrencies for dealing with day-to-day transactions.

To calculate their taxable net capital gains, the bill proposed by virginia Senate is that from the beginning on January 1, 2024, individuals will be able to deduct up to $200 from individual transactions.

This exclusion does not apply to gains produced from using digital assets to purchase goods or services.