New York Proposes 0.2% Excise Tax on Crypto and NFT Transactions to Fund School Programs

New York State Assemblymember Phil Steck has introduced Assembly Bill 8966, which proposes a 0.2% excise tax on cryptocurrency and non-fungible token (NFT) transactions, including sales, transfers, and exchanges involving assets like Bitcoin and Ethereum [1]. The tax is intended to fund substance abuse prevention programs in schools, with implementation set to begin on September 1, 2025 [2]. The bill applies to a wide range of digital asset activities, including transactions involving cryptocurrencies, NFTs, and altcoins, and would affect crypto exchanges, traders, and decentralized finance (DeFi) protocols [3].

The proposal highlights potential compliance challenges for crypto stakeholders and may influence asset transactions in New York, drawing comparisons to the regulatory environment that emerged during the BitLicense era in 2015. At that time, some exchanges exited the state due to the high compliance costs associated with the new regime [4]. While no major exchange closures or mass withdrawals have been confirmed yet, the bill reflects a potential shift in New York’s financial regulatory strategy [5].

The introduction of Assembly Bill 8966 aligns with broader regulatory efforts in the U.S., where states are increasingly taking a proactive approach in the absence of a unified federal tax framework for digital assets [6]. The proposed tax could affect market liquidity and investor behavior, particularly for retail participants who frequently engage in NFT and token trading [7]. Industry observers suggest that if the bill passes, some crypto entities may seek lower-tax jurisdictions, potentially pushing innovation outside heavily regulated areas [8].

New York’s initiative also reflects the growing tension between fostering innovation in digital assets and ensuring regulatory compliance. While proponents argue that the tax will promote transparency and accountability, critics caution that excessive regulation could stifle growth in a sector still in its developmental phase [9]. The debate is expected to intensify as more details emerge and stakeholders weigh in.

Assembly Bill 8966 is still in early stages, with no specific enforcement mechanisms or implementation timelines outlined yet [10]. The bill’s future remains uncertain, as its path to enactment will depend on negotiations, amendments, and broader economic and political considerations [11]. If passed, the proposed tax would represent a significant development in New York’s approach to digital assets and could influence the national regulatory environment [12].

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Source:

[1] https://www.bitget.com/news/detail/12560604913556

[2] https://www.ainvest.com/news/york-proposes-excise-tax-crypto-nft-transactions-2508/

[3] https://coinmarketcap.com/community/articles/689f2f46d09be932afacd82f/

[4] https://www.route-fifty.com/finance/2025/08/states-have-been-forefront-efforts-regulate-cryptocurrency-experts-say/407431/

[6] https://menafn.com/1109932561/NY-Lawmaker-Proposes-New-Tax-On-Crypto-Transactions

[7] https://www.mondaq.com/unitedstates/fin-tech/1665720/new-us-proposals-to-change-how-digital-assets-virtual-currencies-and-cryptocurrencies-are-taxed-could-significantly-impact-the-industry

[8] https://www.arabictrader.com/en/news/cryptocurrencies/192196/the-digital-currency-tax-enters-the-legislative-agenda-in-new-york