President Biden has once again submitted his crypto mining tax increase in a budget proposal
President Joe Biden has resurrected the concept of a 30% tax on electricity used by cryptocurrency miners in his 2025 budget proposal. It’s not the first time it has come up, but could find more support in an election year.
In a US Treasury Department document titled “General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals,” the leadership emphasized that current laws do not address digital assets other than broker and cash transaction reporting. Because of this, the administration seeks to levy an excise tax on digital asset mining. The Treasury document reads:
“Any firm using computing resources, whether owned by the firm or leased from others, to mine digital assets would be subject to an excise tax equal to 30 percent of the costs of electricity used in digital asset mining.”
If enforced, crypto mining companies must report the type and amount of electricity they use and its value if purchased externally. Miners leasing computational capacity would be required to disclose the value of the electricity of the company that leased it to them, which would then serve as the tax base.
The administration indicates the proposal would be in effect for taxable years after December 31, 2024, and will be implemented in three phases: 10% in the first year, 20% in the second year, and 30% in the third year. The tax would also be levied on crypto-mining firms that generate their own electricity, requiring them to pay a 30% tax on their estimated electricity costs.
This is the second time the Biden administration has attempted a 30% tax on electricity for crypto mining. On March 9, 2023, Biden made the same proposal in his 2024 budget.
