Relates to reporting of cryptocurrency holdings on the annual statement of financial disclosure filed with the legislative ethics commission or the joint commission on public ethics.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9086
SPONSOR: Kelles TITLE OF BILL:
An act to amend the public officers law, in relation to reporting of
cryptocurrency holdings on the annual statement of financial disclosure
PURPOSE:
The purpose of this bill is to close the loophole on cryptocurrency
assets on the state's financial disclosure statement and add transparen-
cy regarding individuals' interest in this type of digital financial
property.
SUMMARY OF PROVISIONS:
A new paragraph 16-a is added to subdivision 3 of section 73-a of the
public officers law to require the reporting of type and market value of
cryptocurrencies held by the reporting individual, in excess of $1,000
at the close of the taxable year prior to the date of filing.
For purposes of the bill, "cryptocurrency" is defined as a digital
currency in which encryption techniques are used to regulate the gener-
ation of units and currency and verify the transfer of funds, operating
independently of a central bank.
JUSTIFICATION:
In 2014 the Internal Revenue Service (IRS) ruled that the first non-cen-
tral bank digital cryptocurrency, known as bitcoin, be treated as prop-
erty for tax purposes. This meant that bitcoin would, henceforth, be
subject to capital gains tax. In July 2019, the IRS started sending
letters to cryptocurrency owners warning them to amend their returns and
pay taxes. Additionally, academic research has shown that bitcoin has
some characteristics more like the precious metals market than tradi-
tional currencies, signaling agreement with the IRS decision even if
based on different reasons. Source:
https://en.wikipedia.org/wiki/Cryptocurrency
Because cryptocurrency transactions can be made anonymously, they are
difficult to track and to regulate. They are increasingly popular tools
for cybercrimes and "ransomware," a kind of digital hijacking. The
recent shutdown of the Colonial natural gas pipeline in the US southeast
was an international cyberattack by hackers who demanded payment via
cryptocurrency. This type of digital asset is designed to work as a
medium of exchange of units called "coins". The coins are stored in a
ledger existing in a form of a computerized database and is called a
"blockchain". Cryptocurrency does not exist in physical form (like paper
money) and is typically not issued by a central authority. Bitcoin is
the first decentralized cryptocurrency. Since the release of bitcoin,
many other cryptocurrencies have been created.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
January 1st after enactment
STATE OF NEW YORK
________________________________________________________________________
9086
IN ASSEMBLY
January 31, 2022
___________
Introduced by M. of A. KELLES -- read once and referred to the Committee
on Governmental Operations
AN ACT to amend the public officers law, in relation to reporting of
cryptocurrency holdings on the annual statement of financial disclo-
sure
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 3 of section 73-a of the public officers law is
2 amended by adding a new paragraph 16-a to read as follows:
3 16-a. List below the type and market value of cryptocurrencies held by
4 the reporting individual or such individual's spouse in EXCESS of $1,000
5 at the close of the taxable year last occurring prior to the date of
6 filing. Whenever an interest in cryptocurrencies exists through a bene-
7 ficial interest in a trust, the cryptocurrencies held in such trust
8 shall be listed ONLY IF the reporting individual has knowledge thereof
9 except where the reporting individual or the reporting individual's
10 spouse has transferred assets to such trust for his or her benefit in
11 which event such cryptocurrencies shall be listed unless they are not
12 ascertainable by the reporting individual because the trustee is under
13 an obligation or has been instructed in writing not to disclose the
14 contents of the trust to the reporting individual. Cryptocurrencies of
15 which the reporting individual or the reporting individual's spouse is
16 the owner of record but in which such individual or the reporting indi-
17 vidual's spouse has no beneficial interest shall not be listed. Also
18 list cryptocurrencies owned for investment purposes by a corporation
19 more than fifty percent (50%) of the stock of which is owned or
20 controlled by the reporting individual or such individual's spouse. For
21 the purposes of this item the term "cryptocurrency" shall mean a digital
22 currency in which encryption techniques are used to regulate the gener-
23 ation of units and currency and verify the transfer of funds, operating
24 independently from a central bank.
25 Category of
26 Market Value
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11844-01-1
A. 9086 2
1 as of the close
2 of the taxable
3 year last
4 occurring
5 prior to
6 Self/ Type of the filing of
7 Spouse Cryptocurrency this statement
8 (In Table II)
9 _______________________________________________________________________
10 _______________________________________________________________________
11 _______________________________________________________________________
12 _______________________________________________________________________
13 _______________________________________________________________________
14 § 2. This act shall take effect on the first of January next succeed-
15 ing the date upon which it shall have become a law.
