cryptonews.net
In June and July, Pennsylvania and Washington became the first two states in the country to designate non-fungible tokens (NFTs) as digital assets subject to sales and use taxes. While the Pennsylvania's Department of Revenue initiated the change by adding NFTs to its "tax matrix" without any accompanying guidance, Washington released an interim statement with definitions of key terms and a proposed schema for determining the "source" of NFTs.
The actions of Pennsylvania and Washington related to NFT taxation are recommendations that interpret existing legislation, not entirely new legislation. This means they could be applied retrospectively, as a Pennsylvania's Department of Revenue spokesman said it has the right to collect taxes on NFTs as far back as 2016.
The actions of Pennsylvania and Washington demonstrate a recognition of the need for clarity on NFT taxation, even as the asset class itself continues to evolve. As NFTs become more popular and use cases expand, other states are likely to follow suit and clarify their position on taxation.
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