At least 31 states apply sales taxes to digital products and services, but few if any tax dollars are flowing to them from the hottest commodity in the digital economy: nonfungible tokens, or NFTs.
The revenue gap, however, could be closed soon in two jurisdictions. Both Washington state and Puerto Rico are drafting regulations that would stretch their sales tax on digital products to include NFTs, unique digital assets that act as certificates of authenticity for digital products—including works of art, music, tickets, and collectibles. No other U.S. state revenue agency has yet introduced an NFT sales tax strategy.
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