Washington first state to extend sales taxes to NFT sellers and retailers
Washington has become the first US state to bring Non-Fungible Tokens (NFTs) trading within its sales tax regime. Since July, sellers or retailers must charge the 6.5% state tax and 0.471% Business & Occupancy tax. The latter is only payable if the seller has physical presence in Washington.
NFT’s are digital certificates held in the blockchain / cloud proving the ownership rights of an assets. Assets can be digital (virtual rights to art, music, video’s games) or physical (memorabilia, collectibles, real estate). They may be time limited for example – admission to event or as vouchers for physical goods or services.
Any marketplace facilitating the NFT sale is also liable to collections.
It is likely that more states will follow Washington. 45 states operate a sales tax, with around 30 those imposing taxes on digital or electronic services. Pennsylvania and Puerto Rico have already indicated that they would bring forward legislation this year.
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Global taxing of NFT’s
The EU VAT Committee is reviewing VAT on cryptocurrency payment tokens. At the member state level, confirmation on Belgium Non-Fungible Token VAT and Spain VAT NFT has already been issued. New Zealand GST on NFT’s has also been confirmed.
How VATCalc can help get your NFT VAT right
VATCalc’s tax engine, VAT Calculator, can provide an instant live calculation tool for your NFT sales. And our VAT Auditor tool can help you validate the VAT you have been charged by your suppliers on their invoices.
