Is there sales tax on crypto?

There is usually no sales tax on crypto when you buy it, but there is sales tax when you spend crypto on taxable goods or services. Crypto sales tax rules come from states and countries, not one central law, so the details differ. The common pattern is that the coin is not taxed as a product, while the thing you buy with it is.

Do you pay sales tax when you buy crypto?

In most places that have published rules, no. New York's tax department said in a December 2014 memo that convertible virtual currency is intangible property, and buying intangible property is not subject to sales tax. Kansas said in a November 2020 notice that transaction fees charged by digital currency exchanges are not subject to its sales tax. Illinois is the exception to watch. It has passed a separate 0.2% Digital Asset Tax on crypto bought, transferred or stored for Illinois customers, now set to start on 1 July 2027 after a court-approved delay. It is a tax on the transaction collected by brokers, not a retail sales tax.

Not every US state has issued guidance, and our guide on whether states tax crypto covers how state rules vary. Income tax is a separate question. Selling or spending crypto can create a gain or loss, as explained in how crypto is taxed in the US.

How does sales tax work when paying with crypto?

The shop still owes sales tax on the sale, just as if you had paid in dollars. State guidance agrees on the method:

• New York treats the payment as a barter. Tax is based on the fair market value of the crypto in US dollars at the time of the sale.
• Washington treats bitcoin as payment for the purchase. If the seller converts it straight away, tax is figured on the dollar amount. If not, it uses the bitcoin's dollar value on the sale date, which can come from a reliable price index.
• Kansas bases the tax on the list price of the goods in dollars, not on the crypto's value, and the seller must remit the tax in dollars.

So the crypto sale and the tax are separate. The merchant may also need to keep a record of the crypto's dollar value at the time. For more on spending crypto, see where can you spend crypto.

Is there VAT on crypto?

In the UK, HMRC treats exchanging crypto tokens for pounds, or for other tokens, as a financial service exempt from VAT. If you use tokens to pay for goods or services, normal VAT applies to what you buy, valued at the pound equivalent of the tokens at the time. HMRC bases this partly on the 2015 EU court ruling in the Hedqvist case (C-264/14), which found that swapping traditional currency for bitcoin falls under the VAT exemption for financial services in the EU VAT Directive.

In Australia, the ATO says trading digital currency with an Australian resident is an input-taxed financial supply, so no GST is charged on it. Trades with a non-resident outside Australia are GST-free.

Does a seller owe sales tax on the crypto it receives?

No, not on the crypto itself. New York says the seller owes no sales tax for receiving virtual currency, because it is intangible property. The seller does have to collect tax on what it sold, show that tax on the receipt and pay it to the state in US dollars. Washington adds that its revenue department does not accept bitcoin for tax payments, so a business must convert it first. Payment in crypto to the tax office itself is covered in can you pay taxes with crypto. These positions are as of November 2026.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.