John Michael Montgomery explains on CoinDesk TV’s “First Mover” why he thinks the Sooner State should offer tax incentives to crypto miners.Read MoreFeedzy
Oklahoma State Sen. John Michael Montgomery is co-sponsoring a bill to attract cryptocurrency miners to his state.
The so-called “Commercial Digital Asset Mining Act of 2022,” introduced over a month ago by the Republican, looks to establish a framework of incentives to attract investment and create jobs in this burgeoning industry.
Although certainly not known as a center of tech or finance, there are already mining operations active in Oklahoma, Montgomery noted in an interview with CoinDesk TV’s “First Mover” on Monday.
Some of these firms reportedly approached the senator, he said, in an effort to gauge how to expand and grow their business within the state. This is yet another example of how crypto – once thought to be a hotbed of anti-government political action – is cozying up to the state to seek incentives and protection.
The bill proposes a sales tax exemption for miners that would apply to their utility bills. If passed, Oklahoma would tax crypto mining operations “in a manner similar to historical forms of manufacturing or industrial processing,” two industries that formerly served as the bedrock of the state’s economy. Indeed, Montgomery’s bill is an explicit call to “encourage” a local crypto industry to saddle up in Oklahoma “rather than [in] competing states,” such as neighboring Texas.
“Electricity is already pretty affordable in the state,” Montgomery said on CoinDesk TV.
The state of Oklahoma is the second-largest producer of wind energy in the U.S., and its access to abundant natural gas are two key factors Montgomery pointed to for the state’s ability to support the energy-intensive operations.
Last month the state announced a partnership with Northern Data, a business-to-business (B2B) technology company with a foothold in the crypto sector, to establish its main computing hub in Pryor Creek.
That rollout in Pryor is expected to occur over the next two years and create nearly 150 jobs in the process, according to previous local reports. Northern Data also plans to purchase 250 megawatts of power from the Grand River Dam Authority.
There are stipulations for crypto companies looking to set up shop in Oklahoma. There is a requirement to make an initial property investment of at least $40 million within three years. Companies will also have to create a certain number of full-time jobs in order to claim that credit, though the state has yet to clarify the minimum necessary.
The Oklahoma Tax Commission must also guarantee those stipulations are met. Montgomery said inviting the crypto mining industry could increase tax revenue from utility usage for the state of 4 million, and that revenue would be used as a funding mechanism for public schools.
As in neighboring Texas, Montgomery said there is an opportunity for miners and utility operators to work together on a “need-based basis.” In other words, because mining operations can power up or down based upon changing local energy needs, they can help balance the load, he said.
“We know how much energy [a potential miner] does consume,” he said. “It’s something that helps out the grid ultimately,” he added later.
Further, the energy-intensive and largely profitable industry “empowers utilities to … expand their power offerings,” Montgomery said, fielding a question about a potential increase in power bills across the state.
About half of the state’s population lives on sovereign territory. According to the senator, as yet there are no bitcoin miner plans to build or expand on tribal land.
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