New York Lawmaker Proposes 0.2% Tax on All Crypto Transactions to Fund Substance Abuse Fight, Expected to Raise $158 Million Annually.

New York state lawmaker Phil Steck proposes a 0.2% tax on all digital asset transactions, including NFT and stablecoin transfers, to raise $158 million annually to fight substance abuse in upstate schools. Steck expects this tax to generate the funds, citing a memo shared by the assemblymember. The tax targets cryptocurrency users, whom Steck believes are driven by the desire for quick and instant wealth and are vulnerable to fraud and scams.

New York State Assembly member Phil Steck has introduced a bill that proposes a 0.2% excise tax on all digital asset transactions, including cryptocurrencies, NFTs, and stablecoins. The bill, Assembly Bill 8966, aims to generate $158 million annually to support substance abuse prevention and intervention programs in upstate New York schools [3].

The proposed tax, if enacted, would take effect on September 1, 2025, and would be levied on the individuals or entities facilitating the sale or transfer of digital assets, rather than on buyers or sellers alone [2]. The revenue generated from this levy would be directed toward substance abuse prevention and intervention programs in schools across upstate New York [1].

Steck believes that the growth of the digital asset sector offers a new funding source for critical social initiatives. He expects this tax to generate the necessary funds to address substance abuse issues in upstate schools [3]. The assemblymember cited a memo shared by his office, which outlined the potential revenue the tax could generate annually.

The bill has sparked debate within the crypto community. While some argue that the tax could generate significant revenue for the state, others warn that it could dampen innovation and drive blockchain startups to more tax-friendly jurisdictions [1]. The tax could also affect liquidity on New York-based platforms, making markets less competitive [2].

New York City, a global fintech hub, is home to major crypto companies like Circle, Paxos, Gemini, and Chainalysis. The city's significant attention from the crypto industry means that even a small tax could bring in substantial revenue for the state [2]. However, the state's regulatory environment has been a source of controversy in the past, with some companies leaving after the costly BitLicense requirements in 2015 [3].

The bill must navigate the full legislative process before it can take effect. It must first go through a committee review, followed by a vote in the Assembly, then pass through the Senate. Only after clearing these stages will it land on the governor’s desk, where it could be signed into law or rejected [2].

New York’s decision to introduce a specific excise tax on digital assets sets it apart from states that use lower tax rates to attract crypto businesses. This could influence how other states approach crypto taxation in the future [3].

References:
[1] https://cryptodnes.bg/en/new-york-lawmakers-propose-0-2-tax-on-crypto-transactions/
[2] https://www.cryptotimes.io/2025/08/15/new-york-bill-seeks-fresh-tax-on-digital-asset-transactions/
[3] https://www.cointribune.com/en/new-york-bill-proposes-0-2-percent-tax-on-crypto-and-nft-transactions/