A new bill has been proposed in New York State that aims to implement an excise tax for companies engaged in cryptocurrency mining. The initiators are Senator Liz Krueger and Assemblywoman Anna Kelles. They emphasize that the massive energy consumption of mining farms leads to increased rates for residents and small businesses, necessitating government intervention.
This is reported by Finway
Differentiated Tax Rates and Social Support
Bill S8518 proposes establishing different tax rates based on the level of electricity consumption. Companies using between 2.25 and 5 million kWh will pay $0.02 for each kWh. For consumption up to 10 million kWh, the rate will be $0.03, up to 20 million — $0.04, and above that volume — $0.05 per kWh. These funds are planned to be directed towards an affordable energy program for low- and middle-income households.
“This will allow companies that increase rates for New York residents to make a fair contribution to support those who are most vulnerable to rising utility costs.”
Encouraging Eco-Friendly Mining and Regulatory Policy
Importantly, companies that use renewable energy sources will be able to avoid additional tax payments. In this way, state authorities are not only addressing the burden on the energy grid but also encouraging investments in “green” technologies and the sustainable development of the digital sector.
The authors of the bill refer to research indicating that the activities of mining centers cost state residents an additional approximately $79 million annually, while small businesses incur another $165 million. This issue is becoming increasingly relevant in political discussions as the strain on the economy intensifies.
The explanatory note states that even more electricity is currently consumed by data centers for artificial intelligence; however, the new tax will apply exclusively to cryptocurrency mining. This choice underscores the particular attention of New York authorities to this segment of the digital economy.
New York is known for its strict regulations regarding cryptocurrencies and digital assets. As a result, several companies have already relocated their businesses to other U.S. states where the industry has more favorable conditions for development.