The Kentucky House Budget Committee approved, by a 19-2 vote, a bill to abolish sales tax on electricity for use in cryptocurrency mining. The bill, designed to attract more miners to the state, is now in the Kentucky Senate for review.
The legislature is pushing for a larger crypto appeal despite alleged costs
Motivated by the explosive growth of blockchain technology and the increasing limelight in cryptocurrencies, lawmakers in Kentucky are busy creating laws to appeal to mining.
House Bill 230, approved by the House Budget Committee on Tuesday, aims to encourage miners to move into the state by removing sales tax from the flow of these operations. The bill will now be forwarded to the Senate, where it will be examined along with Senate Bill 255, which also provides tax breaks for miners.
More costs than benefits
According to a tax bill in the bill, this proposed legislation would cost the state’s General Fund at least $ 1 million in estimated annual revenue. Given the energy-intensive nature of cryptocurrency mining, that number could soar significantly if the bills attract mass migration of operations to the state.
Bill sponsor, Republican Representative Steven Rudy, acknowledges the cost to the state, but believes the projected price will ultimately benefit the state by attracting a “sophisticated, highly technical” industry.
However, the bill is not without its criticism as some lawmakers are questioning whether the costs outweigh the benefits given the energy-intensive nature of cryptocurrency mining. Rudy responded to this criticism, stressing that Kentucky would prefer to win industries over to the state rather than turn down business.
Still, Kentucky has shown no signs of slowing its momentum to make the state attractive to the cryptocurrency industry. To underline this point, business representatives have already approved incentives for Blockware Solutions as the company plans to invest $ 28 million in a local mining operation, making the state more attractive to the mining industry as a whole.
Do you think more U.S. states and other countries around the world will be providing tax breaks for crypto mining to attract businesses? Let us know in the comments below.
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