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The Washington state Department of Revenue (WDOR) in July 2022 published detailed guidance on the sales tax consequences of non-fungible token (NFT) sales, the first such guidance in the United States, and other state tax agencies may be eyeing how they too may capture NFT sales tax. Washington’s sales tax law already covers the sale of digital goods, such as video and music recordings, so WDOR may extend sales tax to NFTs that can be viewed or heard. Given that other states also tax digital product sales, Washington’s statement might become a guide to taxing the new universe of NFTs.

Continue reading the full GT Alert.