New York Senator Targets Crypto Mining With Heavy Energy Tax Proposal

New York State Senator Liz Krueger has unveiled a controversial bill that would impose new excise taxes on energy consumption by crypto mining operations. The proposal introduces a tiered tax system based on electricity usage, aiming to crack down on high-consumption miners while exempting operations powered entirely by renewable energy.

Under the plan, crypto miners using 2.25 million kilowatt-hours (kWh) or less per year would not be taxed. However, those consuming between 2.26 million and 5 million kWh would pay 2 cents per kWh. Miners drawing 5–10 million kWh would face 3 cents, those up to 20 million kWh would pay 4 cents, and operations exceeding 20 million kWh annually would be hit with the highest rate of 5 cents per kWh.

This proposal follows New York’s temporary two-year moratorium on certain mining operations signed in 2022, which allowed renewable-powered miners to continue while restricting others. That moratorium expired in 2024, but lawmakers are still under pressure to address energy concerns linked to mining.

Industry experts warn that the new tax could devastate smaller operators dependent on grid electricity, already facing razor-thin margins. Larger mining companies with access to renewable energy infrastructure would gain an even greater competitive edge, potentially pushing small and mid-sized firms out of New York altogether.

The timing adds further strain, as mining costs continue to rise globally. Data from TheMinerMag shows the median cost to mine one Bitcoin surpassed $70,000 in Q2 2025 due to increased network difficulty. Energy prices in New York have also climbed, with average costs reaching $0.08 per kWh in early 2025. For example, mining firm TeraWulf reported a $61.4 million loss in the first quarter, largely due to soaring electricity bills.

If passed, the bill could reshape the state’s crypto mining landscape and accelerate migration of operations to more energy-friendly regions.