New York Bill Proposes 0.2% Tax on Crypto Sales and Transfers

New York Assemblymember Phil Steck has introduced Assembly Bill 8966 to impose a 0.2% tax on crypto transactions. The bill covers both the sale of crypto assets and the transfer of crypto assets, including non-fungible tokens (NFTs).

The bill, submitted to the New York State Assembly on Wednesday, defines the tax as an excise charge on “digital asset transactions, including the sale or transfer of digital assets.” It applies to digital currencies, digital coins, NFTs, or similar assets.

If passed, the crypto tax would take effect immediately, with collections starting September 1. It would apply to all qualifying transactions within the state.

Crypto Tax Revenue Allocated to School Programs

Assembly Bill 8966 directs funds from the crypto tax to a specific program. Revenue would expand a substance abuse prevention and intervention program in upstate New York schools.

The bill states that the crypto tax revenue will be used solely for this purpose. It does not include provisions for other spending.

This earmarking ties the crypto tax to a defined public service initiative, ensuring funds go directly to the program described in the bill.

Bill Requires Multiple Approvals Before Taking Effect

The crypto tax bill must go through the standard legislative process. First, it will be reviewed in a committee. If approved, it moves to a full Assembly vote.

If the Assembly passes it, the measure will proceed to the New York Senate. Following Senate approval, the bill will be sent to the Governor.

The governor can sign the crypto tax bill into law or issue a veto. If signed, the 0.2% tax on crypto transactions would start in early September.

Different State Approaches to Crypto Taxes

In the United States, both federal and state governments can impose taxes. This allows states to set their own rules for crypto taxation.

Some states, including California and New York, treat crypto as cash for tax purposes. In contrast, Washington exempts digital assets from taxes, while Texas has removed certain corporate and income taxes.

Bloomberg Tax reports that most states have not issued formal rules for taxing crypto transactions, leading to inconsistent treatment across the country.

New York’s Role in the Crypto Sector

New York City is home to major crypto companies such as Circle Internet Group, Paxos, Gemini, and Chainalysis. Many other crypto-related businesses operate offices in the city.

The state introduced the BitLicense in 2015, creating a licensing framework for companies dealing in crypto assets. Some companies left the state after the rule took effect, while others, including Circle, Paxos , and Gemini, remained.

Given New York’s position as a major financial hub, the proposed 0.2% tax on crypto transactions could affect many businesses operating in the state’s digital asset sector.