State Lawmakers in Illinois, Georgia Propose Tax Incentives for Bitcoin Miners

Lawmakers in Illinois and Georgia are hoping to give tax breaks to crypto mining companies

Feb 18, 2022 at 5:06 p.m. UTC
Updated Feb 18, 2022 at 9:47 p.m. UTC

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

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 ether 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 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.

Meanwhile, 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 and then signed into law by the governor. 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, some federal lawmakers led by Sen. Elizabeth Warren (D-Mass.), 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.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

CoinDesk - Unknown

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

Trending

1
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
2
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown
3
CoinDesk - Unknown
Thoughts From Davos

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

CoinDesk - Unknown
4
CoinDesk - Unknown
Bitso, primer unicornio cripto de América Latina, despide a 80 empleados

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

CoinDesk - Unknown