On Wednesday, New York State Senator Liz Krueger proposed a bill that aims to impose excise taxes on the energy consumed by cryptocurrency mining companies operating within the state.
The proposed excise tax, which is not the first legislative effort of its kind, will be structured in tiers. There will be no tax for miners using 2.25 million kilowatt-hours (kWh) or less per year, while those consuming between 2.26 million and 5 million kWh annually will incur a tax of 2 cents per kWh.
Miners consuming between 5 million and 10 million kWh per year will face a tax of 3 cents per kWh; those consuming up to 20 million kWh will be charged 4 cents per kWh, and any miner using over 20 million kWh annually will be taxed at 5 cents per kWh.
This proposal exempts miners who utilize 100% renewable energy. Miners harnessing clean energy were permitted to operate in New York during the two-year mining ban moratorium, which was signed into law by Governor Kathy Hochul in 2022 and expired in 2024.
Crypto mining operates in a highly competitive landscape with slim profit margins. The introduction of an energy tax further diminishes these margins, potentially pushing miners who depend on grid electricity to relocate to areas without such added costs.
Related: Abu Dhabi agricultural regulator bans use of farmland for crypto mining
Electricity cost is critical in the mining industry
Companies with the capability to secure land, construct facilities, and develop the infrastructure necessary for utilizing renewable energy resources in remote areas can mitigate or avoid variable energy costs, which are essential for mining operations.
This situation provides these companies with a competitive edge over smaller miners and larger entities that rely on retail-priced grid electricity.
In Q2 2025, the median cost of mining a single Bitcoin (BTC) surpassed $70,000 amid increasing mining difficulty and network hashrate, as reported by TheMinerMag.
Energy costs rose to approximately $0.08 per kWh in the first quarter of 2025, effectively doubling expenses relative to revenue for TeraWulf, a mining company based in upstate New York, resulting in a reported loss of $61.4 million during that time.
Magazine: 7 reasons why Bitcoin mining is a terrible business idea
