In brief
- Assembly Bill 9138, introduced Friday in the New York State Assembly, would tax proof-of-work miners based on electricity consumption, with rates ranging from 2 to 5 cents per kilowatt-hour.
- The companion bill to Senate Bill 8518 would funnel collected taxes into New York’s Energy Affordability Programs for low- to moderate-income households.
- Mining operations using renewable energy and operating off-grid would be exempt from the tax, which takes effect January 1, 2027.
New York lawmakers launched a legislative strike against crypto mining Friday, introducing companion legislation to a Senate bill that would force proof-of-work miners to pay high taxes based on their electricity consumption.
On Friday, Assembly Bill A9138 was introduced in the New York State Assembly by Democratic Assembly member Anna Kelles and referred to the Ways & Means Committee.
The bill would impose an excise tax on electricity used by businesses engaged in digital-asset mining under proof-of-work authentication methods.
This measure is a companion to the S8518 Bill, introduced earlier this month by State Senator Liz Krueger, Chair of the Senate Finance Committee, in the New York State Senate.
Both bills pursue identical goals as they require crypto mining companies to pay into New York’s Energy Affordability Programs based on their electricity consumption.
Operations consuming up to 2.25 million kilowatt-hours annually would pay nothing, according to the bill.
The rate jumps to 2 cents per kWh for consumption over 2.25 million to 5 million kWh per year, 3 cents per kWh for over 5 million to 10 million kWh, 4 cents per kWh for over 10 million to 20 million kWh, and maxes out at 5 cents per kWh for consumption exceeding 20 million kWh annually.
“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 when S8518 was introduced.
Mining facilities powered entirely by renewable energy systems and operating off-grid would dodge the tax, a provision designed to encourage sustainable practices within the digital asset sector, as per A9138.
All collected taxes, interest, and penalties would flow directly to energy affordability programs administered by the Department of Public Service in consultation with the Energy Affordability Policy Working Group.
Making mining “unviable”
If passed, the tax would take effect January 1, 2027, applying to all taxable years thereafter. Both the Senate and Assembly versions remain in committee.
The move resembles those made by Northern European countries like Norway or Sweden, Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, told Decrypt. While those were not explicit bans, he said, “the removal of previous advantages essentially made mining unviable.”
“We may be seeing the same thing playing out here, and the result will be the same,” Puckrin added. “The irony is that moves like these don’t tend to lead to cleaner practices; they just push mining operations out of state.”
Asked whether mining operations would simply relocate to more crypto-friendly states, Puckrin said it would be “the obvious answer,” as moving will be easier and cheaper than “trying to comply with punitive regulations, and there are still plenty of much friendlier options within the U.S.”
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Source: https://decrypt.co/344947/ny-democrats-propose-companion-bill-targeting-proof-of-work-mining
