New York Lawmakers Seek to Tax Energy Consumption by Crypto Miners
New York State Senator Liz Krueger introduced legislation on Wednesday that would impose a tiered excise tax on energy consumed by crypto mining facilities within the state. The bill aims to address the high energy usage associated with digital asset mining while carving out exemptions for operators relying entirely on renewable energy sources.
Details of the Proposed Tax Structure
The proposed excise tax is structured by consumption tiers. No tax will be levied on miners consuming up to 2.25 million kilowatt-hours (kWh) per year. Facilities using 2.26 million to 5 million kWh annually will see a tax of 2 cents per kWh. Miners that use between 5 million and 10 million kWh face a 3-cent charge, and those consuming up to 20 million kWh will owe 4 cents per kWh. For operations exceeding 20 million kWh per year, the tax increases to 5 cents per kWh consumed.
- Under 2.25 million kWh: No tax
- 2.26 million�5 million kWh: $0.02 per kWh
- 5�10 million kWh: $0.03 per kWh
- 10�20 million kWh: $0.04 per kWh
- Over 20 million kWh: $0.05 per kWh
The legislation includes a full exemption for miners using 100% renewable energy. This provision refers to the arrangements permitted under New York's two-year partial mining moratorium, which began in 2022 and lapsed in 2024.
Implications for Crypto Mining Businesses
Crypto mining is an energy-intensive industry operating on thin profit margins. The introduction of a new energy tax could place further pressure on miners, particularly those reliant on retail-priced grid electricity. Observers note that higher costs may force smaller operations out of the state or incentivize larger firms to invest in off-grid renewable energy infrastructure to remain competitive.
Larger mining operations with access to land and capital may be better positioned to develop renewable energy capabilities, gaining a cost advantage over competitors paying the tax. This dynamic could reshape the composition of the mining sector in New York.
Impact on Mining Economics
Recent energy price increases underline potential challenges. In the first quarter of 2025, regional energy rates reportedly reached approximately $0.08 per kWh. This increase doubled electricity costs relative to mining revenue for companies like TeraWulf, which operates a facility in upstate New York. Some miners have scaled back operations or temporarily shut down sites as a result.
The proposed legislation will now be considered by New York lawmakers. If enacted, it could influence mining viability, drive further investment in renewable energy, or shift mining activities to other jurisdictions with lower operating costs.
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