Proposed Legislation on Cryptocurrency Mining Tax
On Wednesday, Liz Krueger, a New York State Senator, proposed new legislation aimed at taxing the electricity consumption of cryptocurrency mining companies within the state. This legislative move introduces a tiered excise tax structure:
- Miners utilizing up to 2.25 million kilowatt-hours (kWh) annually will not incur any tax.
- Those who consume between 2.26 million and 5 million kWh will face a fee of 2 cents for every kWh used.
- The tax escalates for higher consumption levels:
- 3 cents for those consuming between 5 and 10 million kWh
- 4 cents for miners using up to 20 million kWh
- 5 cents per kWh for consumption exceeding 20 million kWh
Exemptions and Legislative Context
Interestingly, the proposed bill offers an exemption for operations powered entirely by renewable energy sources. This move aligns with a wider legislative effort initiated in 2022, when Governor Kathy Hochul signed a moratorium allowing clean energy miners to continue operating in the state for an additional two years, set to expire in 2024.
Impact on the Cryptocurrency Mining Industry
The competitive landscape of the cryptocurrency mining industry is precarious, often characterized by slim profit margins. Imposing an energy tax could exacerbate this issue, potentially pushing businesses that rely on conventional grid electricity to relocate to regions without additional costs. In mining operations, electricity pricing can dramatically affect profitability, sometimes determining the viability of a mining venture.
Larger companies that can invest in infrastructure to capture renewable energy may gain a significant edge over smaller operations that depend on standard grid energy, priced at retail rates.
Challenges Faced by Miners
Recent data highlights the challenges faced by miners. For instance, the median cost to mine a single Bitcoin surged beyond $70,000 in the second quarter of 2025 due to increasing mining difficulty and network hashrate. During the same timeframe, TeraWulf, a mining entity based in upstate New York, reported an uptick in energy prices to approximately $0.08 per kWh, causing their operational costs to double relative to their earnings and leading to a staggering loss of $61.4 million in the first quarter of 2025.
