New York Proposes Tax on Crypto Transactions to Fund School Programs
By: Eliza Bennet
New York is stepping into the arena of digital asset regulation with a new proposal aimed at taxing cryptocurrency transactions. This legislative initiative, spearheaded by Assemblymember Phil Steck, introduces a 0.2% excise tax on the sale and transfer of digital assets, including cryptocurrencies like Bitcoin and Ethereum. The bill, tagged as Assembly Bill 8966, was introduced in the state's Assembly and, if passed, the tax would be effective from September.
The primary objective behind this tax proposal is to generate revenue that will support substance abuse prevention and intervention programs in schools throughout upstate New York. The responsibility for paying this tax is placed on the individuals or entities facilitating the sale or transfer of digital assets. This initiative aligns New York with a growing list of jurisdictions that are exploring different methods to regulate and derive revenue from the rapidly growing crypto economy.
This proposed tax in New York mirrors a broader global trend towards enhancing oversight in the crypto markets. In India, authorities are tightening regulations to improve transparency and compliance, following the discovery of $72 million in unreported crypto income, issuing tens of thousands of notices for undeclared earnings. Similarly, the UK's HMRC is set to require crypto service providers to submit detailed transaction data by 2026 as part of increased transparency measures in the digital asset economy.
Market participants and tax professionals in New York have warned of the potential increase in tax liabilities, especially with the recent rallies in Bitcoin and Ethereum prices. The bullish market could lead to substantial liabilities for traders and investors who must recognize their obligations similar to those in trading traditional assets. The proposed measure is a step towards integrating digital asset taxation into broader fiscal policies, ensuring that the benefits of the growing digital economies are aligned with public welfare initiatives.
