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    Power Play: NY Senator Eyes Crypto Mining Energy Tax

    Under the suggested regulations, mining operations consuming up to 2.25 million kilowatt-hours annually would not be subject to the tax.

    New York State Senator Liz Krueger has put forward a bill on Wednesday that aims to implement excise taxes on the electrical power used by companies engaged in cryptocurrency mining within the state. The drafted legislation outlines a multi-tiered system for taxation based on the total kilowatt-hours consumed each year.
    The proposed law details that crypto miners using 2.25 million kilowatt-hours or less annually will be exempt from paying any taxes. Operations that consume between 2.26 million and 5 million kWh each year would be taxed at a rate of 2 cents for every kWh used.

    For operations using between 5 million and 10 million kWh per year, the tax would be 3 cents per kWh. This rises to 4 cents per kWh for those consuming between 10 million and 20 million kWh each year. The highest tax tier, at 5 cents per kWh, applies to any mining operation consuming over 20 million kWh per year.

    Mining businesses using 100% renewable energy sources are completely exempt from the proposed tax. Previously, environmentally conscious energy miners were permitted to work freely throughout the state’s two year ban which was signed by the state governer Kathy Hochul, back in 2022, and recently expired in 2024.
    Cryptocurrency mining usually yields slight gains as it is extremely competitive. The introduction of an additional energy tax could potentially drive miners, who depend on grid energy, away from New York towards regions with lighter taxes.

    Electricity costs are pivotal for mining businesses. Those with resources to acquire land, construct facilities, and establish renewable energy infrastructure in isolated locations can get an advantage over competitors using grid energy that has retail prices.

    Data indicates that mining a single Bitcoin surpassed $70,000 during the second quarter of 2025, a time when the difficulty of mining as well as the rate of hashrate within the network started rising. During the start of 2025, energy was roughly priced at $0.08 per kWh.

    TeraWulf, a mining operation that maintains a facility located upstate New York, reported losses of $61.4 million in the first quarter of the year. The cost of mining went up due to increasing energy rates during the same period, leading to a doubling of expenses compared to revenue.

    Major mining operations, that rely on clean energy resources, can relieve variable energy costs, which smaller mining companies can not avoid. The competitive structure could intensify if this law is approved by the state government.

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