BUY BITCOIN
The New York State Department of Taxation and Finance released a memorandum on December 5th which excused Bitcoin users from paying sales tax, if the virtual currency is being used to pay for certain goods and services delivered in New York State.
In its elaboration, the memorandum referred cryptocurrencies like Bitcoin as an “intangible property”, which is normally used to conduct barter transactions. “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,” it said.
However, the legal definitions change according to the type of goods and services a virtual currency user buys. The memorandum clearly outlines that “if the party that gives convertible virtual currency in trade receives in exchange goods or services that are subject to sales tax, that party owes sales tax based on the market value of the convertible virtual currency at the time of the transaction, converted to US dollars.”
On the other hand, “if the party that trades property or services in exchange for receiving convertible virtual currency gives the other party a sales slip, invoice, or receipt, the first party must separately state the sales tax due in US dollars on the sales slip, invoice, or receipt.”
Corporate and Personal Income Tax Policy
There are no amendments made to the corporation and personal income tax, which was earlier introduced by the IRS this year. Following the Fed’s guidelines, New York State Tax Law treats cryptocurrencies as a property that is subjected to general tax principles. See IRS Notice 2014-21 to know more.
