Assembly Bill A9138

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9138
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             October 17, 2025
                                ___________
 
 Introduced by M. of A. KELLES -- read once and referred to the Committee
   on Ways and Means
 
 AN  ACT  to  amend the tax law, in relation to imposing an excise tax on
   energy used in digital asset mining using proof-of-work authentication
   methods
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  tax  law is amended by adding a new section 186-h to
 read as follows:
   § 186-H. EXCISE TAX ON ENERGY  USED  IN  DIGITAL  ASSET  MINING  USING
 PROOF-OF-WORK  AUTHENTICATION  METHODS.  1.    FOR  THE PURPOSES OF THIS
 SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "AFFILIATE" MEANS, WITH RESPECT TO ANY SPECIFIED ENTITY, AN ENTITY
 THAT  DIRECTLY,  OR  INDIRECTLY  THROUGH  ONE  OR  MORE  INTERMEDIARIES,
 CONTROLS OR IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH, THE ENTI-
 TY SPECIFIED.
   (B) "BLOCKCHAIN" MEANS DATA THAT IS:
   (I)  SHARED  ACROSS  A  NETWORK  TO CREATE A LEDGER OF VERIFIED TRANS-
 ACTIONS OR INFORMATION AMONG NETWORK PARTICIPANTS LINKED USING  CRYPTOG-
 RAPHY TO MAINTAIN THE INTEGRITY OF THE LEDGER AND TO EXECUTE OTHER FUNC-
 TIONS; AND
   (II) DISTRIBUTED AMONG NETWORK PARTICIPANTS IN AN AUTOMATED FASHION TO
 CONCURRENTLY  UPDATE NETWORK PARTICIPANTS ON THE STATE OF THE LEDGER AND
 ANY OTHER FUNCTIONS.
   (C) "CONTROL" (INCLUDING THE  TERMS  CONTROLLING,  CONTROLLED  BY  AND
 UNDER  COMMON CONTROL WITH) MEANS THE POSSESSION, DIRECT OR INDIRECT, OF
 THE POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT  AND  POLI-
 CIES  OF  AN ENTITY, WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES,
 BY CONTRACT, OR OTHERWISE.
   (D) "CONTROLLED GROUP" MEANS TWO OR MORE ENTITIES THAT ARE  AFFILIATES
 OF EACH OTHER.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10789-04-5
              

 A. 9138                             2
 
   (E)  "DIGITAL  ASSET"  MEANS  AN ASSET THAT IS ISSUED, TRANSFERRED, OR
 BOTH, USING DISTRIBUTED LEDGER OR BLOCKCHAIN TECHNOLOGY, INCLUDING,  BUT
 NOT  LIMITED TO, DIGITAL CURRENCIES, DIGITAL COINS, DIGITAL NON-FUNGIBLE
 TOKENS OR OTHER SIMILAR ASSETS.
   (F)  "DISTRIBUTED  LEDGER  OR  BLOCKCHAIN  TECHNOLOGY" MEANS A DIGITAL
 SYSTEM FOR RECORDING, STORING, AND SHARING DATA OR  TRANSACTIONS  ACROSS
 MULTIPLE COMPUTERS OR DEVICES:
   (I)  IN  WHICH  EACH  PARTICIPANT  MAINTAINS  AN IDENTICAL COPY OF THE
 LEDGER AND UPDATES ARE VALIDATED THROUGH A CONSENSUS MECHANISM AMONG THE
 PARTICIPANTS RATHER THAN BY A SINGLE CENTRALIZED AUTHORITY; AND
   (II) WHICH EMPLOYS CRYPTOGRAPHIC METHODS  TO  ENSURE  DATA  INTEGRITY,
 CHRONOLOGICAL  ORDERING,  AND  RESISTANCE  TO UNAUTHORIZED ALTERATION OF
 RECORDS.
   (III) MAY TAKE THE FORM OF A BLOCKCHAIN NETWORK OR OTHER  DATA  STRUC-
 TURES  THAT PROVIDE DECENTRALIZED VALIDATION, TRANSPARENCY, AND SYNCHRO-
 NIZATION OF RECORDS AMONG PARTICIPANTS, WHETHER PERMISSIONED OR  PERMIS-
 SIONLESS, PUBLIC OR PRIVATE.
   (G)  "DIGITAL ASSET MINING USING PROOF-OF-WORK AUTHENTICATION METHODS"
 MEANS THE OPERATION OF SPECIALIZED COMPUTER HARDWARE OR DEVICES, INCLUD-
 ING BUT NOT LIMITED TO APPLICATION-SPECIFIC INTEGRATED CIRCUITS  (ASICS)
 OR  GRAPHICS  PROCESSING  UNITS  (GPUS) FOR THE PURPOSE OF VALIDATION OR
 AUTHENTICATION OF TRANSACTIONS, RECORDING DATA, OR SECURING CONSENSUS ON
 A DISTRIBUTED LEDGER OR BLOCKCHAIN NETWORK THROUGH THE REPEATED PERFORM-
 ANCE OF COMPUTATIONAL ALGORITHMS. SUCH PROCESSES, COMMONLY  REFERRED  TO
 AS   "PROOF-OF-WORK",  INVOLVE  SOLVING  CRYPTOGRAPHIC  OR  MATHEMATICAL
 PUZZLES OF INCREASING DIFFICULTY IN ORDER TO CREATE NEW UNITS OF DIGITAL
 ASSETS OR TO RECEIVE COMPENSATION IN THE FORM  OF  TRANSACTION  FEES  OR
 BLOCK REWARDS, AND ARE CHARACTERIZED BY CONTINUOUS, HIGH-INTENSITY ELEC-
 TRICITY  CONSUMPTION FOR THE PURPOSE OF VERIFYING TRANSACTIONS AND MAIN-
 TAINING THE INTEGRITY OF THE BLOCKCHAIN.
   2. (A) THERE IS HEREBY IMPOSED ON ANY TAXPAYER ENGAGED IN THE BUSINESS
 OF DIGITAL ASSET MINING USING PROOF-OF-WORK AUTHENTICATION METHODS A TAX
 ON  THE   ANNUAL CONSUMPTION   OF ELECTRICITY  PURCHASED,  PRODUCED,  OR
 ACQUIRED BY SUCH TAXPAYER DURING A TAXABLE YEAR AND USED BY SUCH TAXPAY-
 ER WITH RESPECT TO SUCH BUSINESS IN THIS STATE.
   (B) THE RATE OF TAX IMPOSED BY THIS SECTION SHALL BE AS FOLLOWS:
   (I)  FOR  EVERY KILOWATT-HOUR LESS THAN OR EQUAL TO 2.25 MILLION KILO-
 WATT-HOURS PER YEAR, 0 CENTS PER KILOWATT-HOUR.
   (II) FOR EVERY KILOWATT-HOUR OVER 2.25 MILLION TO 5 MILLION  KILOWATT-
 HOURS PER YEAR, 2 CENTS PER KILOWATT-HOUR.
   (III)  FOR  EVERY KILOWATT-HOUR OVER 5 MILLION TO 10 MILLION KILOWATT-
 HOURS PER YEAR, 3 CENTS PER KILOWATT-HOUR.
   (IV) FOR EVERY KILOWATT-HOUR OVER 10 MILLION TO 20  MILLION  KILOWATT-
 HOURS PER YEAR, 4 CENTS PER KILOWATT-HOUR.
   (V) FOR EVERY KILOWATT-HOUR OVER 20 MILLION KILOWATT-HOURS PER YEAR, 5
 CENTS PER KILOWATT-HOUR.
   (C)  FOR THE PURPOSES OF THIS SECTION, TAXPAYERS IN A CONTROLLED GROUP
 ARE TREATED AS A SINGLE ENTITY FOR THE  PURPOSE  OF  DETERMINING  ANNUAL
 CONSUMPTION  OF ELECTRICITY USED WITH RESPECT TO THE BUSINESS OF DIGITAL
 ASSET MINING USING PROOF-OF-WORK AUTHENTICATION METHODS IN  THIS  STATE,
 AND  SHALL BE JOINTLY AND SEVERALLY LIABLE FOR ANY PAYMENT OWED PURSUANT
 TO THIS SECTION BY ANY ENTITY IN THE CONTROLLED GROUP.
   (D) THE ADMINISTRATIVE PROCEDURES SET FORTH IN ARTICLE TWENTY-SEVEN OF
 THIS CHAPTER SHALL APPLY UNLESS SPECIFIC PROVISIONS TO THE CONTRARY  ARE
 SET FORTH IN THIS SECTION.
 A. 9138                             3
 
   (E)  THE  DEPARTMENT  OF TAXATION AND FINANCE MAY PRESCRIBE SUCH RULES
 AND REGULATIONS AS MAY BE NECESSARY TO CARRY OUT THIS SECTION.
   (F) THE TAX IMPOSED BY THIS SECTION SHALL NOT APPLY TO THE CONSUMPTION
 OF  ELECTRICITY  PRODUCED  BY  RENEWABLE  ENERGY  SYSTEMS, AS DEFINED IN
 SECTION SIXTY-SIX-P OF THE PUBLIC SERVICE LAW, AND CONSUMED BY A FACILI-
 TY THAT IS NOT CONNECTED TO THE ELECTRIC  SYSTEM  AND  NOT  OPERATED  IN
 CONJUNCTION WITH AN ELECTRIC CORPORATION'S TRANSMISSION AND DISTRIBUTION
 FACILITIES.
   3. ALL TAXES, INTEREST, AND PENALTIES COLLECTED OR RECEIVED FROM TAXES
 IMPOSED  BY  THIS  SECTION SHALL BE USED TO PROVIDE BENEFITS TO ELIGIBLE
 RESIDENTIAL CUSTOMERS ENROLLED IN ENERGY AFFORDABILITY PROGRAMS  AUTHOR-
 IZED BY THE PUBLIC SERVICE COMMISSION AND ADMINISTERED BY THE DEPARTMENT
 OF  PUBLIC SERVICE, IN CONSULTATION WITH THE ENERGY AFFORDABILITY POLICY
 WORKING GROUP.
   § 2. This act shall take effect immediately and  shall  apply  to  all
 taxable years commencing on and after January 1, 2027.