NY Bill Taxes Crypto Miners’ Power Use, Funds Energy Aid

Assembly Bill 9138, introduced Friday by Democratic Assembly member Anna Kelles and referred to the Ways & Means Committee, establishes a tiered excise tax specifically targeting businesses engaged in digital-asset mining using proof-of-work authentication methods. The companion legislation, Senate Bill 8518, was introduced earlier this month by State Senator Liz Krueger, Chair of the Senate Finance Committee, with both bills pursuing identical objectives. The tax structure begins with a complete exemption for operations consuming up to 2.25 million kilowatt-hours annually, then escalates progressively: 2 cents per kWh for consumption between 2.25 million and 5 million kWh, 3 cents for 5-10 million kWh, 4 cents for 10-20 million kWh, and peaks at 5 cents per kWh for consumption exceeding 20 million kWh annually.

Senator Krueger justified the legislation in stark terms, stating in her introduction of S8518 that ‘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.’ This framing positions the crypto mining industry as a contributor to energy affordability challenges facing New York residents, particularly low- to moderate-income households who would benefit from the redirected tax revenue.

A critical provision in Assembly Bill 9138 creates a complete exemption for mining facilities powered entirely by renewable energy systems and operating off-grid. This carve-out is explicitly designed to encourage sustainable practices within the digital asset sector, creating a clear financial incentive for miners to transition to cleaner energy sources. The exemption structure acknowledges the environmental concerns associated with proof-of-work mining while attempting to steer the industry toward more climate-friendly operations.

All collected taxes, along with any associated 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. This dedicated funding mechanism ensures that the revenue generated from crypto mining operations would be specifically allocated to assist New York households struggling with utility costs, creating a direct transfer from what lawmakers characterize as energy-intensive industrial operations to consumers facing energy affordability challenges.

Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, drew direct parallels between New York’s proposed legislation and regulatory moves in Northern European countries like Norway and Sweden. ‘While those were not explicit bans,’ Puckrin told Decrypt, ‘the removal of previous advantages essentially made mining unviable.’ He warned that ‘we may be seeing the same thing playing out here, and the result will be the same,’ suggesting that the New York legislation could effectively push mining operations out of the state rather than achieving its stated environmental objectives.

Puckrin highlighted what he sees as the fundamental irony of such regulatory approaches: ‘The irony is that moves like these don’t tend to lead to cleaner practices; they just push mining operations out of state.’ When asked whether mining operations would simply relocate to more crypto-friendly states, Puckrin confirmed this would be ‘the obvious answer,’ noting that moving operations would be easier and cheaper than ‘trying to comply with punitive regulations, and there are still plenty of much friendlier options within the U.S.’ This perspective suggests the legislation might achieve geographic redistribution of mining activity rather than meaningful environmental improvement.

If passed, the tax would take effect on January 1, 2027, applying to all taxable years thereafter. This three-year implementation window provides existing mining operations with substantial lead time to either adapt their energy sourcing, relocate their operations, or potentially challenge the legislation through legal or political channels. The extended timeline also allows for potential amendments and modifications as the bills move through the legislative process.

Currently, both the Senate and Assembly versions remain in committee, meaning the legislation faces significant procedural hurdles before becoming law. The bills must clear their respective committees, pass floor votes in both chambers, and secure the governor’s signature. This legislative journey provides multiple opportunities for industry pushback, compromise, or potential defeat of the measures, though the introduction of companion bills in both chambers indicates coordinated support from key Democratic legislators.