New York Proposes Tiered Energy Tax on Crypto Mining

New York State Senator Liz Krueger, with co-sponsor Andrew Gounardes, introduced Senate Bill S.8518 to impose a tiered excise tax on electricity used for proof-of-work digital-asset mining. The bill exempts the first 2.25 million kWh per miner and would charge 2¢/kWh for 2.26–5M kWh, 3¢ for 5–10M, 4¢ for 10–20M, and 5¢ above 20M, and it treats affiliated entities as a single “controlled group” for aggregation. Operations powered entirely off‑grid or by 100% renewable energy would be exempt, and the tax would take effect for taxable years beginning January 1, 2027. All tax revenue, plus interest and penalties, would fund energy affordability programs and subsidies to assist struggling utility customers. Sponsors say the measure addresses costs miners impose on ratepayers, the grid and the climate, while industry analysts warn the added 2–5¢/kWh levy could erode thin margins, favor larger operators with access to clean energy, and push some miners to leave the state.