New York State Senator Proposes Excise Tax on Crypto Mining Energy Consumption
New York State Senator Liz Krueger has introduced a bill to impose an excise tax on energy used by crypto mining companies operating in the state. The proposed tax is tiered, with miners consuming 2.25 million kilowatt-hours (kWh) or less per year exempt from the tax. Those consuming between 2.26 million and 5 million kWh annually will be charged 2 cents per kWh, while miners using between 5 million and 10 million kWh per year will face a tax of 3 cents per kWh.
Miners with higher energy consumption will be charged accordingly, with those using up to 20 million kWh per year facing a tax of 4 cents per kWh, and those consuming over 20 million kWh per year charged 5 cents per kWh. The proposal also exempts miners using 100% renewable energy, who were allowed to operate in New York under the two-year mining ban moratorium that expired in 2024.
The introduction of this tax could have significant implications for the crypto mining industry in New York, which is already facing narrow profit margins. The added expense of the energy tax could drive miners reliant on grid electricity out of the state and into jurisdictions with more favorable energy costs. This is particularly concerning for smaller miners, who may not have the resources to secure land and develop infrastructure for renewable energy.
Energy Costs and the Mining Industry
Energy costs are a critical factor in the mining industry, with the variable cost of energy being a major input for mining companies. Those that have the resources to secure land, build facilities, and develop infrastructure for renewable energy can mitigate or sidestep this cost, giving them a competitive advantage over smaller miners and large players that rely on grid electricity.
According to TheMinerMag, the median cost of mining a single Bitcoin (BTC) surged in Q1 2025, crossing $70,000 in Q2 2025 amid rising mining difficulty and network hashrate. Energy prices in the first quarter of 2025 rose to about $0.08 per kWh, doubling costs relative to revenue for TeraWulf, a mining company with a facility in upstate New York, causing it to record a loss of $61.4 million during the period.
Implications of the Proposed Tax
The proposed excise tax on crypto mining energy consumption in New York could have far-reaching implications for the industry. While it may encourage the use of renewable energy, it could also drive miners out of the state and into more favorable jurisdictions. As the crypto mining industry continues to evolve, it is essential to consider the impact of such regulations on the industry as a whole.
For more information on the proposed tax and its implications, visit the original source link: https://cointelegraph.com/news/new-york-senator-introduces-crypto-mining-tax?utm_source=rss_feed&utm_medium=rss_tag_bitcoin&utm_campaign=rss_partner_inbound
