NY Senator Proposes Tiered Energy Tax on Crypto Miners

New York State Senator Liz Krueger introduced a bill to levy a tiered excise tax on energy consumption by crypto mining companies operating facilities in the state. This legislative effort aims to address the high energy usage of the industry and its impact on grid costs and environmental goals.

Key details of the proposed tax include:

• Tax Tiers: The tax is structured to target the largest energy users:
  • Consumption of 2.25 million kWh or less per year is exempt (0 cents/kWh).
  • Consumption from 2.26 million to 5 million kWh per year is taxed at 2 cents/kWh.
  • Consumption from 5 million to 10 million kWh per year is taxed at 3 cents/kWh.
  • Consumption up to 20 million kWh per year is taxed at 4 cents/kWh.
  • Consumption over 20 million kWh per year faces the highest rate of 5 cents/kWh.
• Exemption for Renewable Energy: Miners using 100% renewable energy are exempted from the tax, continuing a provision from the state's previous two-year mining moratorium, which expired in 2024.

The article emphasizes that electricity cost is critical for the highly competitive crypto mining business, which operates on narrow profit margins. The new excise tax could drive grid-reliant miners out of New York to jurisdictions with lower costs, as the added expense erodes their profitability. 

The median cost to mine a single Bitcoin has surged, exceeding $70,000 in Q2 2025. Companies with the resources to develop their own renewable energy infrastructure gain a significant competitive advantage over those that rely on the electrical grid and pay retail prices. For example, the mining company TeraWulf recorded a $61.4 million loss in Q1 2025 due to rising energy prices, which nearly doubled their costs relative to revenue.

October 2025, Cryptoniteuae