BILL NUMBER: S5621B
SPONSOR: MAY
 
TITLE OF BILL:
An act to amend the public officers law, in relation to reporting of
digital assets on the annual statement of financial disclosure
 
PURPOSE:
The purpose of this bill is to close the loophole on digital assets,
like bitcoin, on the state's financial disclosure statement and add
transparency 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 name and market value of
digital assets 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, "digital assets" means an asset that is
issued, transferred, or both, using distributed ledger or blockchain
technology, including, but not limited to, digital currencies, digital
coins, digital non-fungible tokens or other similar assets.
 
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 transactions of digital assets like cryptocurrency 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 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 data-
base 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.
 
LEGISLATIVE HISTORY:
2022- S7272 (MAY) THIRD READING/ A9086 (Kelles) Ref Gov Ops
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
January 1 st after enactment