In an attempt to promote Kentucky as a crypto-favored state, a new law has been formulated by the government. This new law is completely in favor of the crypto miners present in the state. This is because from now on, the state will provide tax exemption to crypto miners. The idea behind this is to bring in more companies and individual miners in the state and take full advantage of the currently growing craze about cryptocurreny. As time passes, governments are trying to get in line with crypto as even they know it is the future.
What tax exemption for crypto miners is the government providing?
On the use of electricity for commercial mining, the electricity is subjected to sales and use tax. But this new law will make sure that the miners are not charged any of those. It will also make sure that any form of license tax is also not charged. This will significantly reduce all digital coins’ mining costs and make more sense to go to Kentucky and mine crypto there. This bill has the potential to bring a lot of companies to the state and further promote the use of cryptocurreny.
How will this affect the government?
The Kentucky bill for miners that have now been formulated to the law will be active from July 1. This step by the government is definitely a good thing for the miners, but there are some ways that it will affect the government too. First of all, it will reduce the amount of tax received by the government. And since the amount of electricity used by miners is a lot so, this new law’s cost for the government is a whopping $1 million annually.
In fact, this number is just the starting point. As more businesses and individuals are attracted to the state because of the new incentive, the costs will increase. The Kentucky government is not looking at the short-term earnings that they could make of tax from miners. They are looking at it long-term, and that makes me think how it will actually be beneficial. To answer that, we need to know that the Kentucky state government is already viewing Bitcoin-mining as an industry.
As the industry is just starting to spread its roots, it is important for states to focus on it from now on. This way, when it actually goes mainstream, Kentucky will have a lot of big mining businesses running in their state. I am pretty sure that the government has thought this through. And in an era where Bitcoin is considered as an asset and more valuable than Gold, there cannot be a better law than this.
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