New York State Senator Liz Krueger introduced legislation Wednesday to impose excise taxes on energy consumed by crypto mining companies operating in the state. The bill establishes a tiered tax system based on annual kilowatt-hour consumption.
The proposed framework charges no tax for miners consuming 2.25 million kilowatt-hours or less per year. Miners using between 2.26 million and 5 million kWh annually face a tax rate of 2 cents per kWh.
Operations consuming 5 million to 10 million kWh per year would pay 3 cents per kWh. The rate increases to 4 cents per kWh for consumption between 10 million and 20 million kWh annually. Any miner exceeding 20 million kWh per year faces the highest tier at 5 cents per kWh.
The proposal exempts miners using 100% renewable energy from all tax obligations. Clean energy miners were previously allowed to operate under New York's two-year mining ban moratorium, signed by Governor Kathy Hochul in 2022 and expired in 2024.
Crypto mining operates on narrow profit margins due to intense competition. The additional energy tax could push miners reliant on grid electricity out of New York toward jurisdictions without similar expenses.
Electricity costs represent a critical factor for mining operations. Companies with resources to secure land, build facilities, and develop renewable energy infrastructure in remote locations gain significant advantages over competitors using retail-priced grid power.
The median cost of mining a single Bitcoin crossed $70,000 in Q2 2025 amid rising mining difficulty and network hashrate. Energy prices in the first quarter of 2025 reached approximately $0.08 per kWh.
TeraWulf, a mining company with an upstate New York facility, recorded a $61.4 million loss during the first quarter. The company's costs doubled relative to revenue as energy prices surged during the period.
Large mining operations that harness renewable energy resources mitigate variable energy costs that smaller miners cannot avoid. This competitive dynamic could intensify if the tax proposal advances through the state legislature.