New York lawmakers are moving forward with a bill that aims to impose taxes on Bitcoin miners, highlighting concerns over the excessive electricity usage associated with mining operations. Democratic Senator Liz Krueger and Assemblymember Anna Kelles introduced this initiative, emphasizing that the increased energy consumption from crypto mining is contributing to higher electricity bills for residents.
The proposed legislation, Senate Bill S8518, seeks to impose an excise tax based on the amount of electricity consumed by mining companies. The funds collected from this tax would be directed towards New York’s Energy Affordability Programs, providing critical support to low- and moderate-income families.
Senator Krueger stated, “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.” Research supporting the bill suggests that the influx of cryptomining facilities adds approximately $79 million annually to household costs and $165 million for small businesses across the state.
Under the proposed tax structure, mining operations consuming between 2.25 and 5 million kilowatt-hours would be taxed at 2 cents per kWh. Those consuming between 5 and 10 million kWh would face a rate of 3 cents, while operations using 10 to 20 million kWh would incur a 4-cent tax per kWh. Any consumption exceeding 20 million kWh would be taxed at a rate of 5 cents per kWh. Importantly, the legislation includes an exemption for mining operations powered by sustainable energy to promote innovation and sustainability in the digital asset industry.
Despite criticisms regarding Bitcoin mining’s environmental impact, it’s worth noting that sectors like artificial intelligence and high-powered computing consume even more energy. However, the bill does not address the energy usage of AI data centers, which are increasingly being recognized for their growth in electricity consumption.
New York has historically maintained stringent regulations on the cryptocurrency sector, resulting in some crypto startups relocating to friendlier environments across the U.S. As lawmakers seek to balance energy use and economic support for residents, discussions around the implications of such regulatory changes continue.
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