Kentucky Lawmakers Push for Cryptocurrency Mining Tax Break to Court Miners

5 March 2021 | Updated: 5 March 2021

The Kentucky House Budget Committee has approved a bill in a recent 19-2 vote to remove sales tax on electricity for cryptocurrency mining operations in the state.

Given the explosive growth of blockchain technology and the increased use of cryptocurrencies across the globe, Kentucky lawmakers are searching for ways to court miners and boost mining operations.

House Bill 230, the recently approved cryptocurrency mining bill by the House Budget Committee, is constructed to encourage miners to relocate their equipment to the state by eliminating the sales tax on electricity from mining operations. The bill has ascended to the state Senate, where it will get scrutinized alongside Senate Bill 255, which also calls for tax breaks for miners.

The Argument for Cost Over Benefit
According to a fiscal analysis in House Bill 230, the proposed legislation would shave off at least $1 million in annual receipts from the state’s General Fund. That said, this figure could become much higher if the bill successfully attracts mass migration of miners to the state.

The sponsor of the bill, Republican Representative Steven Rudy, asserts that he is aware of the potential cost on the state but believes that the undertaking will eventually pay off after attracting a “highly sophisticated, highly technical” industry.

Republican Rep. Steven Rudy. Source: Google

However, the bill is not without opposers, as some lawmakers are not convinced that the costs outweigh offsets the benefit considering how energy-intensive cryptocurrency mining is. Nonetheless, Rudy counter-argued that it would be in Kentucky’s favor to attract industries than to chase them off.

Still, Kentucky has shown that it intends to be more receptive to the cryptocurrency industry. Economic officials in the state have recently approved Blockchain Solutions incentives, as the firm is ready to invest $28 million in a local mining operation in the state.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.