- New York Assemblymember Phil Steck introduced a bill to apply a 0.2% excise tax on all cryptocurrency transactions statewide.
- The proposed tax aims to generate about $158 million per year, according to estimates using Chainalysis and economic data from 2022–2023.
- Revenue from the tax would support substance abuse prevention and intervention programs in upstate New York schools.
- The bill would cover a wide range of digital assets, including NFTs, mined or staked assets, and stablecoins.
- Steck cited industry scrutiny, risks of fraud after the FTX collapse, and environmental concerns as added reasons for regulation.
On Wednesday, New York State Assemblymember Phil Steck proposed a 0.2% excise tax on all cryptocurrency transactions taking place in New York. The stated purpose of the tax is to provide additional funding for substance abuse prevention programs in schools across upstate New York, an area significantly affected by the opioid crisis.
The bill, officially known as Bill A0966, is projected to bring in approximately $158 million in annual revenue. Steck’s estimate is based on transaction data from blockchain analytics firm Chainalysis and New York’s share of recent U.S. gross domestic product figures.
A memo shared with Decrypt states: “The funding shall be used to expand the substance abuse prevention and intervention program to schools in upstate New York,” highlighting the direct intention behind the tax revenue. The proposal would apply to various digital assets, including NFTs (non-fungible tokens), cryptocurrencies obtained from mining and staking, and stablecoins.
New York currently treats cryptocurrencies as cash equivalents for tax purposes, similar to states like California, according to Bloomberg Tax. Crypto assets are already subject to capital gains, gift, and estate taxes, as explained in a guide by Bitwave, a crypto accounting platform.
Steck calculated the revenue estimate by referencing the $1 trillion in crypto sent to the U.S. between July 2022 and June 2023, then adjusting that value to $79 billion to reflect New York’s share of the national GDP. This approach was necessary because the New York Department of Financial Services did not release dollar figures for crypto transactions in its quarterly reports, only the number of transactions.
The memo also notes concerns about the environmental impact of crypto mining and ongoing industry risks following events like the collapse of the FTX exchange in 2022. New York State Attorney General Letitia James recovered $50 million from Gemini in a settlement tied to alleged investor deception. In 2023, she filed suit against Gemini, Genesis, and Digital Currency Group for alleged investor fraud.
Steck chairs the state’s Standing Committee on Alcoholism and Drug Abuse, which reported that New York lost 33 people per 100,000 residents to drug overdoses in 2023 and provided support services to more than 730,000 individuals last year.
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