TLDR
- New York proposes a 0.2% tax on crypto sales and transfers to fund school substance abuse programs.
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Assembly Bill 8966 could bring significant revenue from crypto transactions in New York City.
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If passed, the crypto tax bill would go into effect on September 1, 2025.
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New York City, a global financial hub, could see substantial impact from the proposed crypto tax.
New York Assemblymember Phil Steck introduced a bill that seeks to tax crypto asset transactions, including the sale and transfer of digital assets. The bill, Assembly Bill 8966, was presented on Wednesday and proposes an excise tax of 0.2% on all digital asset transactions. If the bill is approved, the tax would take effect immediately starting September 1, 2025.
The proposed tax applies to a wide range of digital assets, including cryptocurrencies like Bitcoin and Ethereum, as well as non-fungible tokens (NFTs). By imposing this tax, New York aims to capture value from the rapidly growing cryptocurrency market. The state is already a significant player in the financial and fintech sectors, which have embraced crypto in recent years.
Purpose of the New York Crypto Tax
One of the primary goals of the proposed tax is to fund substance abuse prevention and intervention programs in upstate New York schools.
According to Steck, the revenue generated from the tax would be earmarked specifically for this cause. The bill highlights the need for additional funding to support these programs, which are crucial for addressing substance abuse issues among students.
“Expanding substance abuse programs is essential to support the health and well-being of students in New York,” said Steck in a statement regarding the bill. The funding from the crypto tax could help address a pressing need for educational resources in schools across the state.
Process for Bill Approval
Before the bill can become law, it must pass through several stages. After being introduced in the Assembly, the bill must be reviewed and approved by a committee. Once passed by the committee, it will be voted on by the full Assembly. If the bill passes the Assembly vote, it will then be sent to the state Senate for approval.
If the Senate approves the bill, it will be sent to the Governor for final approval. The Governor will have the option to either sign the bill into law or veto it. However, if the bill is enacted, it would represent one of the first state-level crypto tax laws in the U.S. to target both crypto sales and transfers.
New York City has long been a financial hub, and its crypto industry is no exception. The city is home to major crypto exchanges and blockchain companies, including Circle, Paxos, and Gemini. These firms have increasingly made their presence felt in the state, contributing to a growing market for digital assets.
By introducing this tax, New York could position itself as a key player in the regulation of cryptocurrency. While the state already treats crypto as a form of property for tax purposes, the new bill aims to formalize the taxation of crypto transactions in a way that is more specific to the industry.
Impact on Crypto Industry and New York’s Economy
The potential revenue generated from the proposed crypto tax could be substantial, given New York’s status as a global fintech hub.
However, the introduction of this tax may also have a broader impact on how crypto transactions are conducted within the state. As New York continues to lead in cryptocurrency regulation, the state could set a precedent for other jurisdictions looking to tax digital assets.
While the crypto industry has been subject to varying levels of regulation across the U.S., New York’s proposal stands out due to its clear intentions to fund a specific social program. As the bill moves through the legislative process, industry stakeholders will be watching closely to see how it may affect the broader crypto market in the state.
