On Wednesday, New York State Senator Liz Krueger proposed a bill to impose excise taxes on energy utilized by crypto mining companies operating within the state.
The proposed excise tax, which marks a continuation of legislative actions of this nature, will be structured in tiers. There will be no tax for miners using 2.25 million kilowatt-hours (kWh) or less annually, while those consuming between 2.26 million and 5 million kWh will face a tax of 2 cents per kWh.
Miners consuming between 5 million and 10 million kWh will incur a 3 cent per kWh charge; those using up to 20 million kWh will be taxed 4 cents per kWh; and any miner exceeding 20 million kWh annually will be taxed at 5 cents per kWh.
The bill exempts miners using 100% renewable energy; these clean energy miners had previously been permitted to operate during the two-year mining ban moratorium signed by Governor Kathy Hochul in 2022, which is set to expire in 2024.
Crypto mining remains a fiercely competitive sector with narrow profit margins. The addition of an energy tax could further squeeze these margins, potentially pushing miners who depend on grid electricity out of New York to areas without this financial burden.
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Electricity cost is critical in the mining industry
Mining companies that can secure land, set up facilities, and create the necessary infrastructure for utilizing renewable energy resources in remote areas can alleviate or avoid variable energy costs, a key factor in mining.
This provides these companies a competitive edge over smaller players and larger entities reliant on grid electricity priced at retail rates.
The average cost to mine a single Bitcoin (BTC) exceeded $70,000 in Q2 2025, amid increasing mining difficulty and network hash rate, according to TheMinerMag.
Energy costs in the first quarter of 2025 soared to approximately $0.08 per kWh, effectively doubling costs in relation to revenue for TeraWulf, a mining firm with operations in upstate New York, which resulted in a reported loss of $61.4 million during that time.
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