Cryptoartists Also Need Creativity Figuring Out State Sales Tax

June 21, 2021, 8:45 AM

The same blockchain technology that makes virtual currencies like bitcoin possible allows artists to distribute their artwork to fans and collectors digitally.

And, like bitcoin enthusiasts, emerging cryptoartists and cryptoart marketplaces are finding themselves enmeshed in a difficult tax compliance environment. Where and when cryptoart might be subject to state sales and use tax is even murkier given the tax collection duties states began imposing on out-of-state vendors after the U.S. Supreme Court’s landmark South Dakota v. Wayfair decision in 2018.

The technology at the root of cryptoart is something called a “non-fungible token” or NFT. “Non-fungible” means that the ...

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