Kentucky Legislators Approve A Bill To Offer Tax Breaks For Crypto Miners
After a 19 to 2 vote, Kentucky legislators voted in favor of a bill likely to attract crypto miners to the state.
On Tuesday Kentucky House budget committee okayed House Bill 230, which proposes tax breaks to crypto mining businesses that open their shop in the state of Kentucky.
A Kentucky-based publication Lexington Herald-Leader reported that the new bill aims at introducing sales and use tax breaks specifically for electricity purchased for use in crypto mines that, in essence, operate on a 24/7 basis.
According to a government's fiscal note in relation to the bill, the state is likely to lose about $9 million per annum if the bill goes through. The loss is approximated on the assumption that at least one mining farm will be established in the coming year while the existing ones will take advantage of the bill to maximize their profits.
The new bill is in tandem with the government’s broad efforts to attract as many tech startups in the state by offering various tax incentives. In related news, the House budget committee okayed another separate bill to offer similar tax breaks for firms starting open data centers within the state.
Representative Steven Rudy, who sponsored the bill, said that Kentucky needs to become a center of crypto miners as it's an industry growing rapidly. He said,
“Mining for cryptocurrency takes a lot of electricity. It is very heavily impactful on industrial-type things. It is not just a few people sitting in their mom’s basement or in their parents’ basement writing code. This is actually highly sophisticated, highly technical.”
The bill will now be introduced to Kentucky’s upper house for a review. This will join the Senate’s similar bill offering tax breaks on mining-based businesses. However, the bill was opposed by some lawmakers citing that mining businesses use high volumes of electricity, which is not a good thing for the state.
The new developments come in the wake of heightened mining activities across the country brought about by the surging prices of digital assets as well as the entry of institutional investors in the crypto space.