Kentucky Proposes to Exempt Bitcoin Miners From Taxes

Kentucky lawmakers have submitted a bill that proposes to offer tax breaks to Bitcoin miners seeking to tap into the energy-rich region.

January 12, 2020 | AtoZ Markets – Representatives of the lower house of the Kentucky General Assembly has presented a draft tax incentive for Bitcoin miners. It aims to increase the attractiveness of the state for commercial cryptocurrency mining.

Kentucky can become a national leader in crypto mining

The measure — entitled "AN ACT relating to the taxation of the commercial mining of cryptocurrency" — was submitted by State Representatives Steven Rudy and Chris Freeland. In the preamble, they pointed out that Kentucky “could become a national leader” in mining because of cheap electricity.

The bill exempts miners from paying 6% sales tax or 6% excise taxes on electricity and equipment bills. According to lawmakers, the benefits will help the region compete with other states.

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Russia has become more active in Bitcoin mining

Russia really has every chance of becoming a leader in the extraction of cryptocurrency. Cheap electricity and a cool climate create ideal conditions for mining. However, while the country’s leadership is in no hurry to develop this direction on an industrial scale, and home mining is considered ineffective.

Obviously, miners prefer countries not only with cheap electricity but also with suitable climatic conditions. It is worthy of note that mining companies are eyeing the Scandinavian countries because of cheap electricity and the opportunity to save on cooling systems.

Last week, Bitcoin's mining difficulty adjusted to a new high, constituting the first such adjustment for 2021. The mining sector is currently experiencing a hardware supply shortage that has made older models more economically attractive amid elevated market activity.

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