In brief
- New York lawmakers have introduced a bill aiming to tax Bitcoin miners.
- Democratic Senator Liz Krueger and Assemblymember Anna Kelles argue that mining operations use too much electricity.
- If passed, the money would be passed to lower income households in the state.
New York lawmakers are trying to tax Bitcoin miners, citing excessive electricity use driving up bills for ordinary citizens as the reason for a new bill.
Democratic Senator Liz Krueger and Assemblymember Anna Kelles introduced a bill Wednesday trying to impose an excise tax on proof-of-work crypto miners.
The proposed law, Senate Bill S8518, wants mining companies to pay—depending on how much energy they consume—to New York’s Energy Affordability Programs, which provide critical assistance to low to moderate 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.
The statement added that research has shown that the arrival of cryptomining facilities “drives up electricity bills statewide, adding an estimated $79 million annually in costs for individuals and $165 million for small businesses.”
Senate Bill S8518 says that miners consuming between 2.25 and 5 million kilowatt-hours would be taxed at 2 cents per kwH. Operations using between five and 10 million kWh would pay 3 cents, and miners using 10 and 20 million kWh would get hit with 4 cents per kwH. Consumption above 20 million kWh would face a rate of 5 cents per kWh.
Mining operations using sustainable energy would be exempt from a tax, the bill said, in a bid to “innovation and sustainability within the digital asset sector.”
To process transactions on proof-of-work cryptocurrencies like Bitcoin and Dogecoin, private companies typically run data centers full of expensive computers that use lots of electricity. Crypto critics have frequently spoken about how damaging digital coins can be to the environment.
Still, the industry of artificial intelligence and high-powered computing uses more energy than Bitcoin mining. The new bill did not mention AI data centers but a press release acknowledged that the industry was growing and using more electricity.
Decrypt reached out to Senator Krueger’s office for further comment.
New York State has historically had tougher regulations on the crypto space, prompting a number of crypto startups in the past to move to other parts of the U.S.
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Source: https://decrypt.co/342769/new-york-democratic-lawmakers-bitcoin-miners-pay-more-tax-why
