
New York State Senator Liz Krueger has introduced a bill seeking to impose a tiered excise tax on electricity consumed by bitcoin mining operations.
The proposal targets large-scale miners, with rates increasing based on annual energy usage.
Details of the proposed tax
Under the bill, miners using up to 2.25 million kilowatt-hours (kWh) per year would not be taxed.
For those consuming 2.26 million to 5 million kWh annually, a tax of 2 cents per kWh would apply.
Miners using 5-10 million kWh would pay 3 cents per kWh, those up to 20 million kWh would pay 4 cents, and operations exceeding 20 million kWh yearly would face the highest rate at 5 cents per kWh.
Exemption for renewable energy miners
Importantly, the bill exempts mining operations powered entirely by renewable energy.
This follows New York’s previous two-year mining moratorium, which allowed such clean energy miners to continue operating.
The moratorium, signed by Governor Kathy Hochul in 2022, expired in 2024.
Impact on mining profitability
Bitcoin mining is already a competitive business with tight margins.
The introduction of additional energy taxes could make it unviable for some firms, especially those reliant on grid electricity.
Larger companies able to build infrastructure for renewables in remote areas may gain a significant advantage, while others could be pushed to relocate out of state.
Rising costs for miners
Recent data shows that the median cost of mining a single bitcoin surpassed $70,000 in Q2 2025, amid increasing mining difficulty and network hashrate.
Energy prices in early 2025 averaged $0.08 per kWh, which doubled the costs for miners like TeraWulf, leading to a $61.4 million loss for the company in Q1 2025.
The competitive landscape for miners in New York is likely to shift dramatically if the proposed tax is enacted, especially for those unable to transition to renewable energy sources.