New York Senate Bill Aims to Tax Crypto Mining Energy Consumption
A new legislative initiative introduced by New York Senator Liz Krueger seeks to impose a tiered tax system on energy used by cryptocurrency mining operations in the state.
On Wednesday, New York State Senator Liz Krueger proposed a bill to impose excise taxes on the energy utilized by cryptocurrency mining facilities operating within the state.
The proposed excise tax is not the first of its kind and introduces a tiered structure: no charge for miners consuming 2.25 million kilowatt-hours (kWh) or less annually, with a tax of 2 cents per kWh for those consuming 2.26 million to 5 million kWh.
Additionally, miners consuming between 5 million-10 million kWh will incur a charge of 3 cents per kWh; those using up to 20 million kWh will face 4 cents per kWh; and any miner exceeding 20 million kWh will face a tax rate of 5 cents per kWh.
Image: First page of the mining energy excise tax bill introduced by New York State Sen. Liz Krueger. Source: New York Senate
The proposal grants exemptions to miners who utilize 100% renewable energy. Clean energy miners were permitted to function in New York during the two-year mining moratorium signed into law by Governor Kathy Hochul in 2022, which is set to expire in 2024.
The cryptocurrency mining sector is fiercely competitive with slim profit margins. The implementation of this energy tax could further squeeze these margins, potentially driving miners dependent on conventional electricity away from New York to regions without this additional cost.
Electricity Expenses Are Critical in the Mining Sector
Mining enterprises capable of securing land and constructing facilities that harness renewable energy in remote locations can mitigate or bypass fluctuating energy costs, essential for mining.
This positions them favorably compared to smaller miners and large entities that depend on grid power billed at retail costs.
The median expense of mining a single Bitcoin has reportedly surpassed $70,000 due to escalating mining complexity and increased network hashrate.
Energy costs surged to approximately $0.08 per kWh in Q1 2025, which doubled the costs relative to earnings for TeraWulf, a mining company with a site in New York, resulting in a $61.4 million loss for the period.
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