U.S. states Georgia and Illinois recently proposed bills that would provide tax incentives for Bitcoin miners. On Thursday, state lawmakers in Georgia introduced a bill that would provide tax exemptions for the sale or use of electricity in mining activities. In late January, the Illinois state senate introduced a bill that would extend existing incentive structures from traditional data centers to miners.
Georgia House Bill 1342 seeks to offer tax exemptions to Bitcoin miners for energy use. Specifically, the bill would amend the state’s existing tax code “to exempt the sale or use of electricity used in the commercial mining of digital assets.” The bill was introduced by Republican representatives Don Parsons, Todd Jones, Katie Dempsey, Heath Clark, and Kasey Carpenter.
Illinois Senate Bill 3643, introduced by State Senator Sue Rezin, attempts to extend existing tax exemptions for data centers to Bitcoin mining centers. Specifically, the bipartisan bill would modify the definition of "qualifying Illinois Data center" to include data centers engaged in cryptocurrency mining. To qualify for the incentive, mining operations must first make an investment of at least $250 million in the state, create at least 20 full-time jobs, and certify that they are carbon neutral within two years of qualifying.
Georgia and Illinois join several other states taking friendly positions toward Bitcoin mining, including Kentucky and Texas, both of whom also offer tax breaks to miners. At the national level, a number of federal lawmakers including Senators Ron Wyden (Oregon), Cynthia Lummis (Wyoming), and Pat Toomey (Pennsylvania), are continuing their efforts to make sure a tax reporting provision in the recently introduced infrastructure bill does not apply to Bitcoin miners.
Bitcoin mining is a growing industry in the U.S. Following China’s crackdown on mining last summer, the global hashrate share of the U.S. doubled. According to data from the Cambridge Center for Alternative Finance, the global share of hashrate in the U.S. jumped from 17.7% in April to 35.4% in July. One of the largest publicly traded Bitcoin mining companies in the world (by market cap), Marathon Digital Holdings Inc., is based in the U.S., with mining operations currently in Montana and Texas.