Senate Bill S8518

2025-2026 Legislative Session

Imposes an excise tax on energy used in digital asset mining using proof-of-work authentication methods

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Current Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Oct 01, 2025	referred to rules

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2025-S8518 (ACTIVE) - Details

Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Add §186-h, Tax L

2025-S8518 (ACTIVE) - Summary

Imposes an excise tax on any taxpayer engaged in the trade or business of digital asset mining; provides that taxes, interest, and penalties collected or received from such taxes shall be used for prompt assistance to utility customers enrolled in energy affordability programs.

2025-S8518 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8518

SPONSOR: KRUEGER
 
TITLE OF BILL:

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

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would create an excise tax on energy used to power cryptocur-
rency mining facilities, with the revenue directed to assistance for
utility customers enrolled in Energy Affordability Programs.

 
SUMMARY OF PROVISIONS:

Section One: amends the tax law by creating a new section 186-h.

186-h.1. Definitions

186-h.2. Imposes an excise tax on electricity used by a taxpayer with

respect to digital asset mining using proof-of-work authentication meth-
ods, at the following rates:

- For every kilowatt-hour less than or equal to 2.25 million kilowatt-
hours per year, 0 cents per kilowatt-hour.

- For every kilowatt-hour over 2.25 million to 5 million kilowatt-hours
per year, 2 cents per kilowatt-hour.

- For every kilowatt-hour over 5 million to 10 million kilowatt-hours
per year, 3 cents per kilowatt-hour.  For every kilowatt-hour over 10
million to 20 million kilowatt-hours per year, 4 cents per kilowatt-
hour.

- For every kilowatt-hour over 20 million kilowatt-hours per year, 5
cents per kilowatt-hour.

Facilities powered by renewable energy systems that are not connected to
the electric grid in any way are exempt from the tax.  186-h.3. All
revenue collected pursuant to this section shall be used to provide
benefits to eligible residential customers enrolled in

Energy Affordability Programs.

Section Two: This act shall take effect immediately and shall apply to
all taxable years commencing on and after January 1, 2027.

 
JUSTIFICATION:

New Yorkers are facing enormous burdens resulting from the unregulated
growth of proof-of-work cryptocurrency mining operations, but are
receiving very few benefits, if any, from them. These cryptomining oper-
ations disrupt surrounding communities, fail to deliver jobs, and under-
pay for their own electricity usage.  Frustratingly, New Yorkers are on
the hook for the massive energy demands of cryptomining - they are being
forced to pay higher electricity bills and directly or indirectly subsi-
dize these operations. Cryptomining operations place a significant
strain on the grid and divert energy away from homes and other busi-
nesses. The cost burden of generating and delivering this additional
electricity falls on all ratepayers. In fact, several localities in New
York State have seen their electricity prices increase substantially
when proof-of-work cryptocurrency miners move to town
(https://bfi.uchicago.edu/wp-content/uploads/2023/06/BFI WP
2023-78.pdf).

Through preferential rates, tax abatements, and competitive contracts,
New York State is providing cryptocurrency mining companies with direct
and indirect subsidies
(https://earthjustice.org/wpcontent/uploads/2024/09/2024.09.23 earthjus-
ticecomments.pdf). For example, under a New York Power Authority
contract, TeraWulf's Lake Mariner Facility in Somerset, NY, currently
receives between 90 and 500 MW of electricity from NYPAf
https://www.nypa.gov/-/media/nypa/documents/documentlibrary/
governance/2020govrep.pdf and appears to pay less than 5 cents/kWh
(https://hntrbrk.com/terawulf/). Digihost in North Tonawanda pays the
equivalent of 3 cents/kWh
(https://waterfrontonline.blog/wpcontent/uploads/2021/04/digihostbuys60m
wpower.pdf), and cryptominers in Plattsburgh paid approximately 2
cents/kWh before the town instituted a new rate to protect their commu-
nity
(https://www.cnbc.com/2018/03/16/plattsburghhas-become-the-first-city-in
-the-us-to-ban-cryptocurrency-mining.html).

Meanwhile, according to the U.S. Energy Information Administration
(https://www.eia.gov/electricity/state/ newyork/), in 2023:

* Residential ratepayers in New York paid an average of 22.25 cents per
kilowatt hours (kW/h) for their electricity.

* Commercial ratepayers in New York paid an average of 18.01 cents/kWh.

* Industrial ratepayers in New York paid an average of 6.87 cents/kWh.

Increasing electricity bills contribute to an unaffordable cost of
living for too many New Yorkers, leading to high amounts of consumer
debt to utilities, increasing numbers of utility service shutoffs, and
hardship as families struggle to also afford housing, food, medicine and
healthcare.

The climate impacts of cryptocurrency mining will be felt globally, but
the operations have disproportionate and damaging impacts on local
communities and environments. The continued operation of cryptomines
threatens the State's climate mandates and pollutes New York's air. The
intense energy demands from cryptomining have also led to extending the
life of gas-fired power plants in New York.  Cryptomining operations
also consume significant amounts of freshwater, create noise pollution,
and generate massive amounts of e-waste.

It is necessary to ensure that the costs are being paid by cryptomining
companies, not subsidized by New Yorkers. This Act seeks to:

a. Reduce unjust and disproportionate energy cost burdens faced by other
electricity ratepayers by incentivizing cryptomining operations to
internalize their negative externalities.

b. Ensure cryptomining operations do not impede the emission reduction
mandates in the CLCPA.

c. Provide an additional source of revenue for energy affordability
programs.

The Act does not impose a ban on cryptocurrency mining. Rather, it
ensures that the negative externalities created by these cryptomining
operations are captured and paid for by the operators, rather than New
Yorkers. Through this excise tax, New Yorkers will benefit from more
affordable electricity bills and less pollution.

 
PRIOR LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

Potential to raise over $700 million in revenue to the state for energy
affordability programs, depending on growth of the cryptocurrency mining
industry and dynamic impacts of the tax.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all taxable
years commencing on and after January 1, 2027.

2025-S8518 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8518
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              October 1, 2025
                                ___________
 
 Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 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

 S. 8518                             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.
 S. 8518                             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.

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Senate Bill S8518

Sponsored By

Current Bill Status - In Senate Committee Rules Committee

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co-Sponsors

2025-S8518 (ACTIVE) - Details

2025-S8518 (ACTIVE) - Summary

2025-S8518 (ACTIVE) - Sponsor Memo

2025-S8518 (ACTIVE) - Bill Text download pdf

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Sponsored By

Liz Krueger

Current Bill Status - In Senate Committee Rules Committee

Actions

co-Sponsors

Andrew Gounardes

2025-S8518 (ACTIVE) - Details

2025-S8518 (ACTIVE) - Summary

2025-S8518 (ACTIVE) - Sponsor Memo

2025-S8518 (ACTIVE) - Bill Text download pdf

Comments