The New York State Senator has taken a tough stance on the Bitcoin mining industry. The state Senate’s new bill, S.8518, places a tiered excise tax on the energy used by mining companies in Bitcoin and other work.
The law, sponsored by Democratic Sen. Liz Kruger and Congress member Anna Ceres, taxes mining operations based on how much energy they use each year. They say they aim to pay mining companies a “fair share” and help families with rising utility bills.
Miners who use up to 2.25 million kilowatt-hours (kWh) per year will not pay taxes. But companies that use more energy will pay:
- 2 cents per kWh for 2.25-5 million kWh energy use
- 5 million to 10 million kWh at 3 cents per kWh
- 10 million kWh at 4 cents per kWh
- 5 cents per kWh for more than 20 million kWh
The bill also uses 100% renewable energy to exempt miners, which requires businesses to stay away from fossil fuels.
All proceeds go to New York’s Energy Affordable Price Program. This helps low-income families pay for their energy bills. Supporters of the bill say this will ease the burden that Bitcoin mining has placed on regular New Yorkers.
“The bill will provide direct relief to families struggling with rising utility costs, ensuring businesses promoting New Yorkers’ electricity bills pay a fair share.” Senator Kruger said in a statement.
Digital assets mining added $79 million annually to household expenses across the state and $165 million to small business expenses, according to a survey cited by lawmakers.
Critics say this has raised electricity prices for New Yorkers and increased greenhouse gas emissions. The bill’s sponsors say mining facilities will exacerbate emissions, strain the grid and push clean energy out.
The bill underscores growing concerns about the amount of energy used by Bitcoin mining.
However, some studies have a different perspective. Research suggests that Bitcoin mining helps stabilize the power grid by increasing demand when usage is low, allowing it to shut down quickly during a surge in electricity demand.
Related: Bitcoin’s Net Positive Environment Impact | List of Recent Research
In some cases, the closure of local Bitcoin mining farms has led to higher electricity prices for residents.
Not everyone is happy with the proposal. Mining companies and industry advocates say the tax will reduce the appeal of New York’s investments. Bitcoin mining is already a high-cost business with thin margins, with more taxes moving companies to other states.
Electricity is key to mining, and businesses on the grid face rising costs.
Some companies, like Terawulf, are already struggling with the energy bill. In early 2025, energy prices increased electricity costs to $0.08/kWh, losing $61.4 million in the quarter. Industry officials say the new taxes will worsen.