New York Proposes 0.2% Excise Tax on Crypto Sales and Transfers

New York lawmakers have introduced legislation that would impose a 0.2% excise tax on the sale and transfer of digital assets, including cryptocurrencies and non-fungible tokens (NFTs), under Assembly Bill 8966. The bill, introduced by Democratic Assemblymember Phil Steck, seeks to generate tax revenue by taxing digital asset transactions, which would take effect on September 1 if passed. The proposed tax is designed to apply to all digital assets, including digital currencies, digital coins, and other similar assets, as defined by the bill [1].

The legislation highlights New York’s continued efforts to shape the regulatory environment for the crypto industry. As the home of major crypto firms such as Circle Internet Group, Paxos, Gemini, and Chainalysis, New York has long been a hub for digital asset activity. The state previously introduced the BitLicense in 2015, one of the first comprehensive regulatory regimes for crypto in the U.S., a move that led to both regulatory clarity and controversy. The introduction of the excise tax underscores the state’s evolving stance, balancing regulatory oversight with revenue generation [1].

Under Steck’s proposal, the revenue generated from the tax would be directed toward expanding substance abuse prevention and intervention programs in schools across upstate New York. This earmarking of funds reflects a broader trend in state legislation that ties revenue from financial products to specific social programs. The bill must first pass through an Assembly committee before being considered by the full Assembly, followed by the Senate, and finally be signed by the governor [1].

The move also places New York in a broader national context, where states are increasingly stepping into the regulatory and tax landscape for crypto. Some states, such as Washington, currently offer tax exemptions for digital assets, while others, like California, treat crypto as cash for tax purposes. The absence of federal guidance has allowed states to take divergent approaches, and New York’s proposed excise tax could influence how other states approach similar taxation models [1].

The bill’s potential impact remains uncertain, as no detailed revenue estimates have been released. However, given New York City’s status as a global financial and fintech hub, the tax could capture a significant share of the state’s digital asset activity. The New York Department of Financial Services has demonstrated a proactive regulatory posture in the crypto space, exemplified by a recent $48.5 million settlement with Paxos for compliance issues, suggesting the state is prepared to enforce a robust regulatory and tax framework [3].

The introduction of this legislation aligns with other tax-related measures in New York, such as the recent extension of additional sales tax authorizations for Jefferson and Fulton counties. While those measures focus on traditional retail transactions, the crypto excise tax signals a shift toward capturing revenue from digital financial instruments. This could represent a significant step in integrating crypto into the state’s broader economic and regulatory framework [2].

The bill is one of several legislative proposals in New York this year aimed at addressing regulatory gaps in emerging sectors, including cannabis retail and congressional ethics. However, the crypto tax legislation is unique in its focus on a financial product that continues to challenge traditional tax systems. With the legislative process still in its early stages, the proposal will need to navigate multiple hurdles before it can become law, but it has already sparked discussions among industry participants about the implications of increased oversight [5].

[1] https://cointelegraph.com/news/new-york-bill-would-tax-crypto-sales-transfers?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound

[2] https://news.bloombergtax.com/daily-tax-report/new-york-extends-jefferson-countys-additional-one-percent-sales-tax

[3] https://www.citationneeded.news/issue-90/

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

[5] https://news.bloombergtax.com/daily-tax-report/new-york-extends-authorization-for-additional-fulton-county-sales-use-tax