The U.S. states of Georgia and Illinois are both looking to introduce tax incentives for cryptocurrency mining, according to legislation filed this year.
According to a bill introduced on Thursday, House representatives in Georgia are proposing tax exemptions for the sale or use of electricity in crypto mining activities. An Illinois Senate bill introduced in late January is also looking to extend an existing tax incentive for data centers to crypto mining.
Mining describes the computing process through which popular cryptocurrencies like bitcoin and ethereum are minted. The energy-intensive process has come under fire by regulators around the world, but the U.S. has embraced it, and is now the market leader in crypto mining.
Georgia and Illinois are just the latest to consider tax incentives for miners. Both Texas and Kentucky offer similar tax breaks to attract miners to their states. Meanwhile, at the national level, Senators Ron Wyden (D-Ore.), Cynthia Lummis (R-Wyo.) and Pat Toomey (R-Pa.) are looking to make sure a crypto tax reporting provision in the U.S.’ infrastructure bill does not apply to miners.
After China – previously the world leader in bitcoin mining – outlawed all crypto mining activities in the country in May 2021, the U.S. quickly picked up on demand. According to data from the Cambridge University’s Centre for Alternative Finance, within three months of China’s ban, the U.S. became the hottest bitcoin mining spot in the world, racking up 35% of the bitcoin hashrate or the computing power used per second in the bitcoin mining process.
Like Kentucky House Bill 230, the Georgia House Bill 1342 is looking to entice bitcoin miners by offering up tax breaks for energy use. The four Republican lawmakers in Georgia who introduced the bill are seeking to amend the state’s official tax code to include “exemptions from sales and use tax, so as to exempt the sale or use of electricity” used in the commercial mining of digital assets.
anwhile, the bipartisan Illinois Senate Bill 3643, introduced by State Sen. Sue Rezin (R) looks to amend the Civil Administrative Code of Illinois to include crypto mining centers as “qualifying Illinois Data center” over a 60-month period, effective immediately if the bill is passed into law. State Sen. Julie A. Morrison (D) added her name to the bill on Wednesday.
But to qualify for the Illinois tax incentive, existing and new enterprises looking to make use of the incentive must first make an investment of no less than $250 million in the state and create at least 20 full-time jobs. Within two years of qualifying, enterprises must also certify they are carbon neutral, according to the proposed bill.
Meanwhile, lawmakers led by Sen. Elizabeth Warren, are scrutinizing crypto mining companies on their climate impact. In 2019, the global bitcoin mining industry used more energy than Poland, a country with roughly 38 million people, according to the Cambridge Centre.