New bill aims to make bitcoin miners pay higher taxes for excessive energy consumption.
Lawmakers in the State of New York are seeking to introduce a new tax on bitcoin miners, arguing that their excessive use of electricity is driving up bills for ordinary citizens. On October 1, Democratic Senator Liz Krueger and Assemblymember Anna Kelles introduced a bill that aims to impose an excise tax on mining operations based on the proof-of-work consensus mechanism.
The legislative proposal, identified as Senate Bill S8518, stipulates that mining companies would pay taxes—proportional to their energy consumption—destined for New York’s Energy Affordability Programs, which provide essential assistance to low- and middle-income households across the State.
“The bill ensures that the companies driving up New Yorkers’ electricity rates pay their fair share, while providing direct relief to families struggling with rising utility costs,” Senator Krueger said in a statement.
According to the statement, research has shown that the arrival of dedicated mining facilities is increasing electricity bills statewide, adding an estimated $79 million per year for private citizens and $165 million for small businesses.
How the tax would work
Senate Bill S8518 establishes that miners consuming between 2.25 and 5 million kilowatt-hours would be taxed at 2 cents per kWh. Operations using between 5 and 10 million kWh would pay 3 cents, while miners consuming between 10 and 20 million kWh would be hit with 4 cents per kWh. Consumption above 20 million kWh would face a rate of 5 cents per kWh.
Mining operations that use sustainable energy would be exempt from the tax, according to the bill, in an effort to promote “innovation and sustainability within the digital asset sector.”
