Legislation: Bill S.8518, introduced by Senator Liz Krueger (D) and Assemblymember Anna Kelles (D), aims to impose an excise tax on proof-of-work (PoW) cryptocurrency mining operations in New York. The tax is intended to make large energy-hungry crypto miners pay their fair share, especially since their electricity usage increases bills for residential ratepayers and small businesses. Revenue from the tax would go toward energy affordability programs for low- and moderate-income New Yorkers.
How the Tax Would Work
The proposed tax uses a sliding scale based on annual electricity consumption by the mining facilities:
| Annual Energy Use | Tax Rate (cents per kWh) |
|---|---|
| ≤ 2.25 million kWh | No tax (exempt) |
| 2.25M-5M kWh | 2¢ per kWh |
| 5M-10M kWh | 3¢ per kWh |
| 10M-20M kWh | 4¢ per kWh |
| Over 20M kWh | 5¢ per kWh |
- Exemptions: Mining operations powered by 100% renewable energy and those not connected to the grid would be exempt from this tax.
Reasons & Context
- High energy usage & cost impact: PoW crypto mining consumes large amounts of electricity, often raising demand and causing higher utility costs for other users. New York ratepayers and small businesses are thought to be bearing increased electricity and grid infrastructure costs due to mining.
- Moratorium history: New York had earlier enacted a two-year moratorium (starting in 2022) on crypto mining operations that relied on fossil-fuel powered plants, especially for proof-of-work mining, unless they used renewable energy. That moratorium expired in 2024.
- Environmental & climate goals: Given the state’s climate targets, legislators are concerned about greenhouse gas emissions, water use, ecological impacts, and whether energy‐intensive mining is consistent with clean energy commitments.
Estimated Impact
- Revenue: The bill is expected to raise over US$500 million annually for energy affordability programs.
- Cost for miners: Miners using grid electricity (especially large-scale PoW operations) would see higher operating costs depending on their energy usage and where their facility falls within the tax tiers. Smaller miners below the exemption threshold would not be taxed.
Potential Implications & Debate
- Relocation risk: Some crypto mining operations may consider moving to states or jurisdictions with lower electricity costs or less regulatory burden if the tax significantly increases their costs. TradingView
- Encouragement for renewables: The exemption for fully renewable‐powered miners could push more operations toward clean energy, off-grid facilities, or investments in renewables.
- Ratepayer relief: If enacted, the policy could reduce electricity burden on residential users and small businesses by shifting cost shares.
- Regulatory complexity: Defining what counts as “100% renewable,” ensuring accurate measurement of electricity consumption, and monitoring compliance could pose enforcement challenges.
Status & Next Steps
- The legislation is proposed — not yet law. It must pass through New York State’s legislative process (both Senate and Assembly) and then be signed by the governor.
- There will likely be debate and possibly amendments, especially around thresholds, rates, exemptions, and how revenues are used.
- Stakeholders including mining companies, environmental groups, utility regulators, and affected local communities are expected to weigh in.
