New York lawmakers have taken a harsher stance towards bitcoin mining industry. A new bill in the state Senate, S.8518, would impose a tiered excise tax on the energy used by Bitcoin and other proof-of-work mining companies.
The legislation, sponsored by Democratic Senator Liz Krueger and Assemblymember Anna Kelles, would tax mining operations based on how much energy they use each year. They say it aims to make mining companies pay their “fair share” and help families with rising utility bills.
Miners using up to 2.25 million kilowatt-hours (kWh) per year wouldn’t pay a tax. But companies using more energy would pay:
2 cents per kWh for energy use between 2.25 and 5 million kWh
3 cents per kWh for 5 to 10 million kWh
4 cents per kWh for 10 to 20 million kWh
5 cents per kWh for anything above 20 million kWh
The bill would also exempt miners using 100% renewable energy, so companies would have to switch away from fossil fuels.
All the revenue would go to New York’s Energy Affordability Programs, which help low- and moderate-income households pay their energy bills. Supporters of the bill say this would ease the burden that bitcoin mining has put on regular New Yorkers.
“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.
According to research cited by the lawmakers, mining of digital assets has added $79 million annually to household costs and $165 million to small business costs across the state.
Critics say this has raised electricity prices for New Yorkers and increased greenhouse gas emissions. The bill’s sponsors say mining facilities worsen emissions, burden the grid, and push out clean energy.
The bill highlights the growing concern about how much energy bitcoin mining uses.
However, some research offers a different perspective. Studies suggest that bitcoin mining can actually help stabilize power grids by increasing demand when usage is low, and shutting down quickly during surges in electricity demand.
Related: Bitcoin’s Net-Positive Environmental Impact | List of Recent Studies
In some cases, the shutdown of a local bitcoin mining farm has even led to higher electricity prices for residents.
Not everyone is happy with the proposal. Mining companies and industry supporters say the tax will make New York less attractive for investment. Bitcoin mining is already a high-cost business with thin margins, and more taxes will force companies to move to other states.
Electricity is key to mining, and companies on the grid will face rising costs.
Some companies like TeraWulf are already struggling with energy bills. In early 2025, rising energy prices pushed their electricity cost to $0.08/kWh, and they lost $61.4 million in one quarter. Industry insiders say a new tax will make it worse.
