Digital currency enthusiasts might have a new reason to enjoy the Big Apple. The state of New York has recently labeled bitcoin as “intangible property,” which means that any purchase or transaction made with bitcoin will not be subject to sales tax.
In a recent memorandum, the New York State Department of Taxation and Finance explains:
“The use of convertible virtual currency by a customer to pay for goods or services delivered in New York State is treated as a barter transaction. For sales tax purposes, convertible virtual currency is intangible property. Since the purchase or use of intangible property is not subject to sales tax, any convertible virtual currency received by a party to a barter transaction is not subject to sales tax.”
New York has witnessed mixed reactions to the decision. Bitcoin Association Co-Founder David Mondrus says that while the ruling makes “perfect sense due to the IRS guidance,” it “is yet another example of the old rusting monolith that is government showing its irrelevancy.”
Of course, New York is also the birthplace of Benjamin Lawsky’s controversial BitLicense proposal, which details licensing and customer address tracking for businesses that delve in the digital currency, so a few raised eyebrows regarding what some are calling New York’s sudden “change of heart” towards bitcoin should not be surprising.
However, the state’s decision has also caused a few to wonder if perhaps bitcoin and its cryptocurrency cousins are finally finding a solid place in the world, and that maybe government is no longer viewing the digital finance arena with a worried expression on its face.