The Corporate Alternative Minimum Tax (CAMT) – The Digital Chamber & Digital Power Network’s Opposition

What is CAMT?

The Corporate Alternative Minimum Tax (CAMT), created by the Inflation Reduction Act of 2022, sets a 15% minimum tax for large corporations that earn more than $1 billion per year on average. Instead of relying on the traditional tax system, which allows companies to lower their taxable income through deductions and credits, the CAMT is based on the income they report to investors in their financial statements. This new system was designed to ensure that highly profitable companies can’t reduce their tax bills to near-zero using accounting strategies, and that they contribute a baseline amount in federal taxes each year.

How Did CAMT Come to Include Unrealized Crypto Gains?

In December 2023, the Financial Accounting Standards Board (FASB) updated its rules to require companies to report the fair market value of digital assets on their financial statements.

This shift means that unrealized gains and losses must now be reflected in a company’s reported income, even if those assets haven’t been sold. Because CAMT calculations are tied to this financial statement income, these paper gains can now trigger real tax obligations. As a result, companies with significant crypto holdings may find themselves liable for taxes on value they have not yet realized in cash, raising concerns about liquidity, fairness, and unintended consequences for digital asset innovation.

Who is Affected?

The intersection of CAMT and the new accounting standards primarily impacts large corporations with significant digital asset holdings. These companies may face substantial tax bills based on paper gains, without having liquidated the assets to generate cash. This scenario raises concerns about liquidity and financial planning, especially in volatile markets.

Legislative Response

Senators Lummis (R-WY) and Moreno (R-OH) have called on the Treasury to issue guidance that excludes unrealized crypto gains from CAMT calculations. They argue that taxing unrealized gains is inconsistent with traditional tax principles and could hinder innovation in the digital asset space. The senators suggest that the Treasury has the authority to adjust CAMT regulations to prevent unintended consequences and maintain a fair tax environment for U.S. companies.

Conclusion

The application of CAMT to unrealized cryptocurrency gains has sparked debate over tax fairness and economic competitiveness. As the Treasury considers potential adjustments, stakeholders await clarity on how digital assets will be treated under the evolving tax landscape.

The Digital Chamber and Digital Power Network oppose CAMT and urge for its swift repeal.