State lawmakers in Illinois, Georgia, have proposed tax breaks for bitcoin miners

2022-05-14 0 By

Georgia and Illinois are the latest states to consider tax breaks for US crypto miners Under legislation introduced this year, both the US states of Georgia and Illinois want to introduce tax breaks for cryptocurrency mining.Under a bill introduced Thursday, Georgia’s House of Representatives proposed tax exemptions for the sale or use of electricity in crypto mining activities.A bill introduced in the Illinois Senate in late January also wants to extend existing data-center tax credits to crypto mining.Mining describes the calculations for popular cryptocurrencies like Bitcoin and Ether.Energy-intensive processes have come under fire from regulators around the world, but the United States has embraced it and is now the market leader in crypto mining.Georgia and Illinois are only the latest states to consider tax incentives for miners.Texas and Kentucky both offer similar tax breaks to lure miners to their states.Meanwhile, at the national level, Senators Ron Wyden (D-Ore.), Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.) are seeking to ensure that the encrypted tax reporting provision in the U.S. Infrastructure Act does not apply to miners.After China — formerly the world leader in bitcoin mining — banned all crypto mining activities in the country in May 2021, the US quickly recovered demand.In the three months following the Chinese ban, the United States became the world’s hottest bitcoin mining spot, accounting for 35 percent of bitcoin’s hash rate, or the amount of computing power used per second in bitcoin mining, according to Cambridge University’s Center for Alternative Finance.Like Kentucky House Bill 230, Georgia House Bill 1342 hopes to attract bitcoin miners by offering tax breaks for energy use.Georgia’s four Republican lawmakers who sponsored the bill are seeking to amend the state’s official tax code to include a “sales and use tax exemption for the sale or use of electricity used in the commercial exploitation of digital assets.”Recently, the state senate Sue Rezin (R) proposed by the bipartisan senate bill 3643, Illinois want to modify the code of civil administration, Illinois will encrypt mining center in 60 months listed as “qualified Illinois data center”, if the bill passes, and then signed into law by the governor, is effective immediately.State Senator Julie A. Morrison added her name to the bill on Wednesday.But to qualify for the Illinois tax credit, existing and new businesses that want to take advantage of the incentive must first invest at least $250 million in the state and create at least 20 full-time jobs.Under the proposed bill, companies would also have to prove they are carbon neutral within two years of qualifying.Meanwhile, a group of federal lawmakers, led by Senator Elizabeth Warren, Democrat of Massachusetts, is examining the climate impact of crypto mining companies.In 2019, the global bitcoin mining industry used more energy than Poland, a country of about 38 million people, according to the Cambridge Center.