Non-Fungible Tokens – Subject to Pennsylvania Sales and Use Tax
July 6, 2022
This past May, the Pennsylvania Department of Revenue issued REV-717, an updated guide for retailers on the Commonwealth’s State and Local Sales, Use and Hotel Occupancy Tax.
Interestingly, the portion of REV-717 discussing computer hardware and software specifically enumerated non-fungible tokens (“NFTs”) as being subject to Pennsylvania’s sales and use tax.
NFTs have recently grown in popularity due to publicity from high profile purchases by celebrities like Steph Curry and Eminem. NFTs are essentially digital assets that can consist of anything from art, to music, or videos, which can then be financially secured using the blockchain system, similar to cryptocurrencies such as Bitcoin. As the name suggests, NFTs are usually unique, one-of-a-kind items which generates their value.