Senators consider tax on electricity used for cryptocurrency mining

The Nebraska Legislature’s Revenue Committee considered a bill Wednesday to tax the electricity used for the cryptocurrency industry.

Sen. Mike Jacobson introduced the legislation, LB526, at the request of Gov. Jim Pillen.

The bill would place an excise tax of one cent per kilowatt hour on electricity used for cryptocurrency mining operations. These operations use power-hungry hardware to verify crypto transactions. Crypto miners are then rewarded with cryptocurrency for their efforts.

Jacobson said the excise tax is necessary to preserve electricity for other industries. He said the Nebraska Public Power District calculates around half of the electricity supplied to Kearney goes to cryptocurrency mining operations.

"This is about electricity usage," he said. "It's not about a single currency. A penny per kilowatt hour will not force cryptocurrency miners out of the state."

Opponents of the bill, like Matthew Carson of AAIM Data Centers Inc. in Aurora, said the bill could cause tech companies with bitcoin mining operations like his to relocate.

“Senate Bill 526 would see the state of Nebraska discriminate my business simply because of how it operates, and force me to leave a place that I hold so dear,” he said.

The Revenue Committee will determine whether to send the bill to the full Legislature for debate.

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