New York Lawmakers Target Crypto Mining With New Tax Bill

Crypto mining firms in New York State may soon start paying more taxes if the new assembly bill A9138 passes. Assembly member Anna Kelles, a Democrat, introduced a new bill. It proposes an excise tax on electricity used for crypto mining.

According to the bill, it will tax energy used for proof-of-work digital asset mining. It has now been referred to the House Ways and Means Committee for deliberations.

Legislative Bills Seek to Make Crypto Mining Firms Pay More for Energy

The A9138 bill is companion legislation to S8518. It was introduced in the New York State Senate earlier this month by State Senator Liz Krueger. Per the proposed legislation, crypto miners are responsible for making energy costlier and must therefore pay more.

Thus, crypto mining firms have to pay into the state’s Energy Affordability Programs based on their energy consumption. Firms consuming between 2.25 million and 5 million kWh a year are to pay 2 cents. However, this increases to 3 cents for consumption of over 5 million kWh to 10 million kWh.

Those using more than 10 million kWh per year pay 4 cents per kWh. At the same time, the cost for consumption above 20 million kWh per year is 5 cents per kWh.

Krueger said the bill aims to make crypto mining companies pay their fair share. It would require them to support energy affordability programs.

The proposed legislation reads:

The law is set to take effect by the start of 2027 if passed, and will apply from then on. The two bills are still at the committee level. Interestingly, the proposed legislation exempts companies that rely entirely on renewable energy and operate off-grid.

However, reactions to the bills have not been positive, with many people expressing concerns about potential impacts. Experts believe it could force out crypto miners from New York rather than encouraging innovation and clean energy.

New York Stands Apart as More States Go Pro-Bitcoin

Meanwhile, the proposed anti-mining legislation in New York continues a trend of anti-crypto laws in the state. Besides the two bills seeking to tax crypto mining, the state also has a bill seeking to impose a 0.2% tax on crypto transactions.

Some pro-crypto bills are currently being developed. One would let state agencies accept crypto payments. This could indirectly support the growth of crypto mining. However, all 12 existing crypto-related bills are currently in the committee stage, with not much progress so far.

This is significantly different from the progress being made in other states all over the US. A few states, including Texas, Arizona, and New Hampshire, have already enacted strategic Bitcoin Reserves legislation.

Several others, such as Massachusetts, Michigan, Wyoming, and Ohio, also have pending legislation. Some states, including Arkansas, Louisiana, Oklahoma, and Montana, have even passed laws to protect Bitcoin mining or prevent the taxing of crypto transactions.

Interestingly, even New York City has proven mostly pro-crypto. The current mayor, Eric Adams, recently established an Office of Digital Assets and Blockchain Technology.

The future of crypto in New York City hinges on the upcoming mayoral election. Since Adams isn’t running again, the next mayor could shape the city’s crypto policies.

One of the candidates, Andrew Cuomo, has promised to prioritize crypto. The favorite for the election, Zohran Mamdani, has criticized Cuomo’s crypto campaign policy as a potential conflict of interest.