New York Bill Proposes 0.2% Tax on Crypto and NFT Transactions

A new proposal in the New York State Assembly aims to impose a small tax on cryptocurrency sales and transfers. Assembly member Phil Steck has introduced legislation seeking a 0.2% excise tax on digital asset transactions, including cryptocurrencies and non-fungible tokens (NFTs). The bill, if passed, could reshape the way the state approaches digital finance while channeling revenue into school-based substance abuse prevention programs.

Revenue for School-Based Initiatives

The suggested bill is called Assembly Bill 8966, and it would amend the state taxation to include sales and transfers of digital assets. This incorporates digital currencies, coins, NFTs, and so on blockchain-based assets. Once passed, the taxation scheme would immediately go into effect and all transactions would be subject to tax as of September 1.

One of the bill’s distinctive features is its allocation of funds. All proceeds from the proposed tax would support substance abuse prevention and intervention programs in schools across upstate New York. 

Steck argues that the growth of the digital asset sector offers a new funding source for critical social initiatives. This earmarking of tax revenue distinguishes the proposal from general state tax measures.

The plan comes at a time when the federal and state tax treatment of crypto remains inconsistent. While some states, like Washington, exempt digital assets from taxation, others such as California and New York treat them similarly to cash transactions. According to Bloomberg Tax data, introducing a specific excise tax would set New York apart from states that use lower tax rates to attract crypto businesses.

Impact on New York’s Crypto Industry

New York City remains a key hub for traditional finance and digital asset companies. It hosts major firms like Circle, Paxos, Gemini, and Chainalysis. As a global fintech center, a proposed tax could generate substantial revenue from local crypto transactions.

New York’s regulatory environment often sparks controversy among industry leaders. Some companies left after 2015’s costly BitLicense requirements. Others, including key players, adapted to the rules and pursued the stability of a regulated market.

The bill should initially go through committees where it can then be passed to a full vote in the Assembly. It would then go to the Senate to be approved and passed on to the governor to be signed. Although the future of this proposal is not clear, it is a sure sign that New York is ready to balance issues between public policy and economic innovation.