New York Proposes 0.2% Excise Tax on Crypto and NFT Transactions

New York State lawmakers have introduced a proposal that would impose a 0.2% excise tax on digital asset transactions, including those involving cryptocurrencies such as Bitcoin and Ethereum, as well as non-fungible tokens (NFTs). The initiative, known as Assembly Bill 8966, was introduced by Assemblymember Phil Steck on August 13, 2025, and is scheduled to take effect on September 1, 2025 [1]. The tax will apply to both the sale and transfer of digital assets and will be levied on entities that facilitate these transactions, rather than on individual buyers or sellers [2].

The primary objective of the tax is to generate revenue to support substance abuse prevention and intervention programs in upstate New York schools [3]. Steck, the bill's sponsor, has emphasized the importance of addressing public health concerns, stating that expanding these programs is essential to the well-being of students. The proposal is part of a broader trend of governments exploring new ways to regulate and tax the rapidly growing digital asset market.

Despite the relatively low tax rate of 0.2%, analysts suggest that it could have a significant impact on high-frequency traders and those engaging in large-volume transactions. The added cost may discourage such activity within New York, potentially leading traders to shift operations to exchanges outside the state [5]. This could result in reduced liquidity and market activity in New York-based platforms, which in turn may affect the state's position as a hub for cryptocurrency innovation and technology [6].

Critics of the proposal warn that the tax could also deter blockchain startups and crypto businesses from operating in New York, pushing them to more crypto-friendly jurisdictions. The regulatory burden, combined with the cost implications of the tax, might undermine the state’s ability to attract and retain digital asset companies [6]. Furthermore, some observers have speculated that the tax could influence trading strategies, encouraging longer-term holding behaviors to minimize exposure to the new levy [7].

The introduction of Assembly Bill 8966 reflects the ongoing evolution of New York's regulatory approach to digital assets. Since the implementation of the BitLicense framework in 2015, the state has played a pivotal role in shaping cryptocurrency regulation in the United States. The proposed tax could represent another milestone in this regulatory journey, influencing how other states and jurisdictions approach taxation in the digital finance sector.

The bill has yet to receive widespread commentary from major exchanges or industry leaders, with only Steck publicly outlining its intent. However, as the proposal moves forward, it is likely to attract increased attention from both supporters and detractors within the crypto ecosystem. The outcome of the legislative process will have broader implications for the market dynamics and regulatory environment in New York and beyond.

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Sources:

[1] Source: CoinCentral (https://coincentral.com/new-york-proposes-0-2-tax-on-crypto-sales-and-transfers-under-new-bill/)

[2] Source: Blockonomi (https://blockonomi.com/new-york-targets-0-2-from-each-crypto-trade-traders-risk-fee-drain/)

[3] Source: AInvest (https://www.ainvest.com/news/york-proposes-0-2-excise-tax-crypto-nft-transactions-fund-school-programs-2508/)

[4] Source: CryptoDnes.bg (https://cryptodnes.bg/en/new-york-lawmakers-propose-0-2-tax-on-crypto-transactions/)

[5] Source: Coindoo (https://coindoo.com/crypto-transfers-could-soon-face-a-new-tax-in-new-york/)

[6] Source: MEXC (https://www.mexc.com/news/new-york-assembly-bill-seeks-0-2-excise-tax-on-crypto-and-nft-transactions/65421)

[7] Source: CoinMarketCal (https://coinmarketcal.com/en/news/new-york-lawmakers-propose-crypto-tax-to-fund-school-programs)