New York Senator Proposes Tiered Energy Tax on Cryptocurrency Mining

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A new bill in New York State seeks to impose escalating excise taxes on the energy consumed by cryptocurrency mining companies. Introduced by Senator Liz Krueger, the legislation would charge miners more as their energy usage increases.

The proposed tax structure is tiered as follows:

• No charge for miners using 2.25 million kWh or less per year.
• 2 cents per kWh for consumption between 2.26 million and 5 million kWh.
• 3 cents per kWh for consumption between 5 million and 10 million kWh.
• 4 cents per kWh for consumption up to 20 million kWh.
• 5 cents per kWh for any consumption over 20 million kWh annually.

Notably, the proposal includes an exemption for miners who use 100% renewable energy. This follows the expiration of New York’s two-year moratorium on certain mining operations, which had similarly allowed clean-energy miners to continue operating.

Given that crypto mining is a business with notoriously narrow profit margins, this new tax could significantly erode profitability. Analysts suggest it could ultimately drive miners who rely on grid electricity out of New York to jurisdictions without such added costs.