New York proposes tiered electricity tax on crypto miners

The tax structure would work as follows: mining operations using up to 2.25 million kilowatt-hours annually would pay nothing. Usage between 2.25 million and 5 million kilowatt-hours would be taxed at 2 cents per kilowatt-hour.

The rate would increase to 3 cents per kilowatt-hour for usage between 5 million and 10 million kilowatt-hours, 4 cents for usage between 10 million and 20 million kilowatt-hours, and 5 cents for anything above 20 million kilowatt-hours. The tax would start on January 1, 2027. Mining facilities that run entirely on off-grid renewable energy would not pay the tax.

When Krueger introduced S8518, she said the bill would make companies that increase electricity rates for New Yorkers contribute their share while helping families afford higher utility costs. Kelles has said that residential and business customers pay higher power prices while some crypto facilities pay lower rates. She stated the tax would fund bill assistance programs.

New York paused new fossil-fuel-powered proof-of-work mining in 2022 and asked the Department of Environmental Conservation to study how these operations affect the environment.

S8518 formally lists A9138 as its companion bill. Both bills are currently in committee. The lawmakers are now working to create a tax system based on electricity consumption rather than relying only on permit restrictions.