New York Senator Proposes Bill to Tax Crypto Miners by Electricity Use

Highlights:

• A New York Senator has proposed a bill that introduces a tiered tax on crypto miners with heavy electricity use.
• The rising costs and higher electricity prices may put a strain on miners.
• Larger crypto miners with renewable energy may avoid taxes while smaller firms risk leaving New York operations.

A bill presented by New York State Senator Liz Krueger is set to tax crypto mining activities on a tiered basis. The proposal would apply to miners who use large amounts of electricity and would be geared towards associating taxation rates with the energy consumed per year.

New York Pushes Tiered Energy Tax on Crypto Mining, Exempts Green Power

New York State Senator Liz Krueger has introduced a bill that would impose a tiered excise tax on crypto miners based on electricity consumption. Companies using less than 2.25 million kilowatt-hours (kWh)… pic.twitter.com/rXwYLA8pB0

— BABA CRYPTO (@babacryptoio) October 3, 2025

The plan would not impose any charge on companies that consumed less than 2.25 million kilowatt-hours (kWh) of electricity yearly. Consumers with a range of 2.26 to 5 million kWh would pay 2 cents per kWh, and those beyond would attract a higher cost. Mining operations using over 20 million kWh would pay 5 cents per kWh, the highest tier outlined in the bill.

The proposal exempts miners who rely entirely on renewable energy. This measure follows New York’s earlier two-year moratorium on non-renewable-powered mining, which ended in 2024. At that time, the state permitted only operations powered by clean energy to continue. Lawmakers are now trying to strike a balance between economic activity and the environmental costs of proof-of-work mining. The new bill places pressure on companies to transition away from grid electricity, which often carries higher carbon emissions.

Supporters of the bill argue that large-scale mining operations strain New York’s energy system and push up household costs. Lawmakers want companies that consume such high amounts of power to contribute to programs that help residents with energy bills. Critics in the mining industry, however, say the plan could drive operations out of the state. Other regions have moved to ban crypto mining in specific regions. For instance, Abu Dhabi banned crypto mining on farmlands. Meanwhile, Russia launched a crypto registry for crypto miners to curb energy abuse.

Rising Costs as New York Senator Proposes Bill on Mining Power Use

The bill arrives at a moment when mining expenses already weigh heavily on the industry. By the second quarter of this year, the median cost to mine a single Bitcoin had surpassed $70,000. The process has become resource-intensive because of the rising hashrates and the network difficulty. The electric charges also increased, and New York miners paid approximately 0.08 kWh in the first quarter.

These pressures have left companies with narrowing margins. TeraWulf, a miner with an upstate New York facility, reported a $61.4 million loss earlier this year. Such figures highlight how dependent mining firms are on electricity costs. The new tax, if implemented, could push many firms relying on grid electricity toward unprofitability. Smaller companies may find it impossible to compete without access to low-cost renewable infrastructure.

TeraWulf reported a $61.4M net loss in Q1 2025, with revenue dropping to $34.4M and cost of revenue ballooning to 71.4% of income. Post-halving pressure and U.S. tariffs have miners selling 40% of BTC mined in March — the highest since Oct. 2024. ⚠️#BitcoinMining #TeraWulf… pic.twitter.com/aOAkW4XbxZ

— BlocknBuzz (@Uni24_co_za) May 10, 2025

In contrast, larger operators with the capital to develop clean energy resources may maintain their advantage. These companies can avoid the tax entirely by running on renewable sources. The proposed legislation could also accelerate the shift of mining operations away from New York toward states with cheaper energy.

Wider Tax Debate and National Concerns on Crypto Miners

Senator Krueger said the proposal ensures miners “pay their fair share” while easing pressure on residents facing higher utility costs. The funds raised would flow into New York’s Energy Affordability Programs, which support households with limited income. Research cited in the bill links crypto mining facilities to an estimated $79 million in extra yearly costs for individuals. Small businesses reportedly face an additional $165 million burden because of higher electricity bills.

National officials are also concerned about crypto mining beyond New York. Congressman Zachary Nunn requested the Treasury Department to audit Chinese-related mining companies in September. He cited the risk related to ownership structures, financing, and possible connections to critical infrastructure. Bitmain and Cango companies have denied any improper connections, but keep growing in the United States.