Crypto Mining Firms Targeted: U.S. Treasury Proposes 30% Tax on Electricity Costs
Crypto mining firms based in the United States could be subject to a 30% tax on electricity costs under a new budget proposal aimed at reducing mining activity.
According to a March 9 supplementary budget explainer paper by the Department of the Treasury, any firm using owned or rented mining rigs would be “subject to an excise tax equal to 30 percent of the costs of electricity used in digital asset mining.”
Notably, the proposed tax would be implemented next year and phased in gradually over a period of three years at a rate of 10% a year, reaching the target 30% tax rate by the end of 2026.
Crypto miners would also need to report the amount and type of electricity they use, as well as the value of that electricity. This means that even miners who use off-grid electricity for their operations would still need to pay taxes.
The provision explicitly mentions that the new change is aimed at reducing mining activity "along with its associated environmental impacts and other harms." The Treasury added that the energy consumption of crypto mining operations increases prices for those sharing a grid and creates uncertainty and risks to local communities.
“The increase in energy consumption attributable to the growth of digital asset mining has negative environmental effects and can have environmental justice implications as well as increase energy prices for those that share an electricity grid with digital asset miners,” the document reads.
“Digital asset mining also creates uncertainty and risks to local utilities and communities, as mining activity is highly variable and highly mobile. An excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and
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