New York State Legislatures want to tax crypto sales and transfers.

New York, the US state, is attempting to tax crypto and impossible tokens (NFTs) sales and transfers under the bill introduced in the state legislature.

Congressional Bill 8966, introduced Wednesday by Democrat Phil Steck, adds a 0.2% excise tax to “digital asset transactions that include the sale or transfer of digital assets.”

The bill will take effect immediately if passed and will apply to all sales and transactions starting September 1st.

If enacted, the bill could bring significant tax revenue to the state as New York City is the world’s largest financial and fintech hub.

Crypto taxes to fund school substance abuse programs

Steck’s bill indicates that funds from crypto tax sales should be allocated to expand the “substance abuse prevention and intervention program for upstate New York schools.”

The bill makes it clear that state tax laws will be changed and that new collections will apply to “digital currency, digital coins, digital inappropriate tokens, or other similar assets.”

There are several steps to take before the bill becomes law. You must pass the Congressional Committee before you can vote before the entire Congress. They are then sent to the Senate, and if approved, they are sent to the governor who passes or rejects the bill.

State taxes on cryptography vary widely

In the United States, both federal and state governments can collect taxes. This leads to lower corporate and income taxes or, in the case of Texas, completely scrapping the state to attract businesses that want to minimize tax bills.

According to Bloomberg Tax, most states do not have guidance on how tax authorities treat crypto, but other states, such as California and New York, treat crypto as cash, but as cash.

State-by-state crypto tax laws as of July 2022. source: Bloomberg Tax

New York’s hometown Crypto Bigtimers

New York, and more specifically, New York City, has long been the home of the heavyweights of the crypto industry, due to its position as a global finance center.

Related: White House Cryptography Rules Crypto Company Brings SEC-CFTC Clarity for the US: Lawyers

Stablecoin Issuers Circle Internet Internet Group and Paxos are headquartered in the city along with Crypto Exchange Gemini and Analytics Firm Chainalysis, but many other crypto companies operate their offices there.

New York was the first US state to launch a comprehensive regulatory regime for crypto and introduce BitResense in 2015. This is a split permit that has left the nation as many crypto companies were so burdened that other companies, such as Circle, Pax and Gemini, embraced the opportunity to be controlled.

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