Over 16 states have imposed taxes on online marketplaces that accept cryptocurrency, according to Bloomberg Tax.
Marketplace facilitator laws requires marketplaces like Amazon and Etsy to collect sales on behalf of their vendors if they cross a specific threshold in the state. The states are jumping on the chance to tax these virtual currencies in expectation of their further growth and popularity.
Many expect that Facebook’s new cryptocurrency Libra will make this method of payment much more common. “Credits” that people can buy or earn through video games or other online platforms can be cashed in for upgrades or products. The new state laws will include a tax on these online credits as well.
Mark Nebergall, president of the Software Finance & Tax Executives Council, says, “I’m not sure if states without the provision are missing out on potential revenue. It would be very hard to tell. If it happens they are, it isn’t much.”
The tax could become a big money-maker in the future if the use of cryptocurrencies becomes more common place or an online market like Amazon were to introduce the payment option on their platform.