What is the advantages to mine in USA ?

[@AllexFerr]

Once more I would like to hear you guys opnion

[1714848081]

1714848081

[1714848081]

1714848081

[DaveF]

Depends where you are in the country.

There are a few mining facilities opening up in NY.
1) Cheap(ish) empty data centers. As has been discussed somewhere else on the board big corps are always chasing the 'next big thing' so a lot of fulling working data centers are empty now since they built a 'better' one right next door. The power and cooling and data infrastructure is already there.
2) Upstate NY, where some of these DC are has a lot of cheap hydro power
3) Cooler weather during the summer and cold weather during the winter help cooling vs other places
4) Short trip to NYC where you have a lot of VC people

Texas:
1) Cheap power and the state has agreed to subsidize losses due to power issues.
2) Same as NY, there are a lot of empty data centers as newer ones are built
3) A lot of tax incentives

Those are the only 2 states I follow, I'm sure other people can chime in where they live / do business.

-Dave

[@AllexFerr]

How much is the income TAX for miners ?
how much electricity cost in NY

[DaveF]

How much is the income TAX for miners ?
how much electricity cost in NY

1) Depends on how you do things in terms of selling the coins and writing off costs and many other things. There is no simple answer. 
2) Last I heard the hydro places were paying between $0.03 and $0.04 but that was 2020 & 21. No idea now.
There seems to be a push against it in NY at the moment, will have to see how that plays out but for now

https://www.power-eng.com/renewables/new-york-hydropower-site-fully-dedicated-to-cryptocurrency-mining/

-Dave

[Coinfarm ventures]

Don't start a mining farm in 'Noo Yawk'. If you make a profit, they have a ridiculous income tax. They charge a ridiculous sales tax too. The power rate is much higher than 3-4 cents unless you sign a deal directly with a power plant. The publicly available rate at 1 MW is probably 5-6 cents in the west/central load zone. The state as a whole is unfriendly to the crypto industry. The only advantage will be the low temperature.

I recommend finding a state which isn't a stereotypical mining state like WA/TX/NY, browsing through the utility tariff documents, and hopefully finding a place that offers ~5 cents without having too much competition from other miners. Don't choose a location which is too hot, like southern/west TX, AZ or NM. I've heard of a large farm located in NJ moving to OH this month, so you might want to consider that state as the weather is cooler.

I can also give you a list of states where you can't find power for < 6 cents anywhere in the state: CA, NJ, FL, CT, MA, RI, PA, DE, MD, VA. Disregard these states entirely.

[@AllexFerr]

Sales TAXx and Income TAX

how does that works
what is the calculation ?

[DaveF]

Sales tax has nothing to do with mining.
If you are only worried about power cost then for a large farm you are doing it wrong.
If you can move into an empty DC or factory or other facility that already has all or at least most of the power / cooling / infrastructure you are already there.
Because doing it properly can cost 10s of millions and take months.

If you want to do it quick and dirty then yes you can move in just about anywhere with cheap power, then all you have to worry about is the infrastructure failing or not having stable power.

-Dave

[@AllexFerr]

If you sell a used machine is consider a sale, righ?

[philipma1957]

If you sell a used machine is consider a sale, righ?

maybe.

but you need to determine its cost.

that can be complex.

[Coinfarm ventures]

Sales tax has nothing to do with mining.

Sales tax/use tax absolutely is important because it means getting 5% to 9% less equipment for the same price. Same with import tariff or VAT. There are strategies to defer sales tax for up to a year, but it needs to be paid eventually. That's why it's worth considering zero sales tax states like MT/NH/OR as long as the power is cheap enough. If you're selling hashrate to customers in the U.S., that can be considered a taxable service in some states like Texas, while other states like Pennsylvania don't tax it.

[DaveF]

Sales tax has nothing to do with mining.

Sales tax/use tax absolutely is important because it means getting 5% to 9% less equipment for the same price. Same with import tariff or VAT. There are strategies to defer sales tax for up to a year, but it needs to be paid eventually. That's why it's worth considering zero sales tax states like MT/NH/OR as long as the power is cheap enough. If you're selling hashrate to customers in the U.S., that can be considered a taxable service in some states like Texas, while other states like Pennsylvania don't tax it.

You are talking about a few separate things.

If you are running a business (that in theory is making money) in New York those items are tax exempt.
If you are buying them to run for people then depending on how you do your service it may or may not have taxes in NY
If you are buying them to run for yourself but selling the hash to others then it's taxable.

The above 3 lines can also be 100% wrong depending on how you setup your business and contracts and deal with other things.

This is why tax lawyers and accountants charge so much.

-Dave

[Coinfarm ventures]

You are talking about a few separate things.

If you are running a business (that in theory is making money) in New York those items are tax exempt.
If you are buying them to run for people then depending on how you do your service it may or may not have taxes in NY
If you are buying them to run for yourself but selling the hash to others then it's taxable.

It looks like you are correct when it comes to New York. Other states have similar exemptions for equipment used in producing products.

[Nitt371]

I suggest we get back to the topic. Are there any advantages of mining in the USA versus other countries? What country has the most crypto-friendly/mining-friendly policy regarding taxes and benefits?

[Coinfarm ventures]

I suggest we get back to the topic. Are there any advantages of mining in the USA versus other countries?

Economic freedom /property rights would be the main advantage. The government can't just confiscate the mining farm or Bitcoins as long as you follow the law. Banning cryptocurrency or mining is very difficult since it needs to pass the legislative and judicial branches.

For taxes, yes the rates are high... but there are so many depreciation incentives that the effective tax rate can be as low as zero as long as you keep re-investing in more equipment.

Finally, there are big established power markets like ERCOT or PJM where you can buy lots of energy with lots of options for the contract structure. As an example, Riot Whinstone has a fixed ERCOT contract for 2.9¢/kWh. They have massively profited because now the energy price in Texas has doubled.

If you want to mine in the U.S., I recommend the Midwest since there are less mining farms there and they won't crack down on mining like 'Noo Yawk'. You might pay more for power but the weather is cooler than Georgia or Texas or Oklahoma.

[FP91G]

I suggest we get back to the topic. Are there any advantages of mining in the USA versus other countries? What country has the most crypto-friendly/mining-friendly policy regarding taxes and benefits?

I think the best country for a first business is your home country. In some countries, economic freedom and property rights are not always respected, but there are no taxes on mining and there is cheap electricity. The US has very expensive lawyers and very strict control.

[Larson311]

Interesting thanks. Do you have any website to recommend for searching such facilities?
I always struggle to find online the available power at the facility and often owner are wrong regarding this information.

Many thanks,

Larson311

Sales tax has nothing to do with mining.
If you are only worried about power cost then for a large farm you are doing it wrong.
If you can move into an empty DC or factory or other facility that already has all or at least most of the power / cooling / infrastructure you are already there.
Because doing it properly can cost 10s of millions and take months.

If you want to do it quick and dirty then yes you can move in just about anywhere with cheap power, then all you have to worry about is the infrastructure failing or not having stable power.

-Dave

[DaveF]

Side note but important; miners as a rule are on the bottom of the food chain in terms of who gets power:

https://insidebitcoins.com/news/extremely-high-temperatures-in-texas-force-crypto-miners-to-go-offline

Come to Texas to mine....it will be great....unless it gets hot.
I am 100% sure that just about every place is going to do this but it seems to be happening more and more in hotter locations. Businesses get lured into locations with the promise of cheap power / taxes / labor / whatever and when something happens they take the hit. It's easier to tell a mine to shut down then 10000 people to shut off their air conditioners.

-Dave

[spectre71]

Interesting thanks. Do you have any website to recommend for searching such facilities?
I always struggle to find online the available power at the facility and often owner are wrong regarding this information.

Many thanks,

Larson311

Well here in NE Oklahoma we have Hydro and wind from the south as well. Where I am at I have 4.3 cents per kwh. That's why we have Google and many other large consumers here. Lots of free commercial space as well.

Northern Data has inked a deal Grand River Damn Authority for 250Mw mining op.

[NotFuzzyWarm]

Side note but important; miners as a rule are on the bottom of the food chain in terms of who gets power:
https://insidebitcoins.com/news/extremely-high-temperatures-in-texas-force-crypto-miners-to-go-offline
Come to Texas to mine....it will be great....unless it gets hot.
I am 100% sure that just about every place is going to do this but it seems to be happening more and more in hotter locations. Businesses get lured into locations with the promise of cheap power / taxes / labor / whatever and when something happens they take the hit. It's easier to tell a mine to shut down then 10000 people to shut off their air conditioners.
-Dave

Those large farms in Texas were brought online fully expecting the cutbacks and as part of their contracts the farms are partly reimbursed by their electric providers for the lost revenue to encourage the farms cutting back when needed. I've made mention several times in the past about the service agreements they have in place and provisions for them cutting back/temporarily shutting down operations to ensure adequate power for the rest of the states consumers.

[hZti]

Those large farms in Texas were brought online fully expecting the cutbacks and as part of their contracts the farms are partly reimbursed by their electric providers for the lost revenue to encourage the farms cutting back when needed. I've made mention several times in the past about the service agreements they have in place and provisions for them cutting back/temporarily shutting down operations to ensure adequate power for the rest of the states consumers.

It may be that they will get some kind of compensation for the time that they have to be offline to save power. Still this will be a fixed rate that is set in a contract and if the next bullrunn happens and they can't mine for some reason they will be pretty fucked up because they will only get a small compensation. If I had the option I would only mine where I had full control if I go offline or not.