New York State Proposes 0.2% Crypto Transaction Tax, Annual Revenue Could Reach $158 Million
New York State Assemblyman Phil Steck has proposed a legislative initiative to impose a 0.2% sales tax on cryptocurrency transactions (whether through centralized or decentralized platforms), which is expected to bring in $158 million in revenue for New York State each year.
Assemblyman Steck noted in the bill that the funds generated from the cryptocurrency sales tax will be used to support youth drug abuse prevention programs in northern New York schools, helping more students stay away from the dangers of drugs.
According to data from Chainalysis for 2022 to 2023 and recent GDP statistics, this tax is estimated to generate $158 million in revenue annually, equivalent to 15% of the local public school’s annual budget.
The bill covers NFT transactions, mining profits, staking rewards, and stablecoin transactions, continuing the tax practice of treating cryptocurrencies as “cash equivalents” in New York and eight other states.
The proposal has sparked a strong market reaction. Within 24 hours of the bill's announcement, the withdrawal volume of New York users from centralized exchanges like Coinbase surged by 300%, while decentralized platforms like XBIT, due to their non-custodial structure and low fees, became a tax avoidance “safe haven” during the tax storm.
While opponents worry that the new tax could lead to capital flowing to lower-tax regions, supporters believe that this move will help fill regulatory gaps and curb illegal trading activities.
Currently, the bill has not yet passed a state assembly vote, but it has triggered responses from the crypto industry. Some exchanges have begun to restrict functionalities for New York users; meanwhile, privacy-focused DeFi platforms are helping users mitigate their tax burdens through cross-chain transactions and zero-knowledge proofs.
Overall, if the bill is eventually passed, New York will become the first state in the U.S. to systematically tax cryptocurrency transactions, which could prompt similar policy measures at the federal level.