Illinois has enacted a 0.2% tax on digital asset transactions starting Jan. 1, 2027, prompting industry groups to call it one of the most punitive crypto tax laws in the US.
Crypto News
Illinois Governor JB Pritzker signed a 0.2% tax on digital asset transactions into law on June 16. The provision, called the Digital Asset Tax Act, was attached to a broader $56 billion state budget bill. Two people familiar with the legislative process said the tax was added in the final stages of negotiations.
The tax takes effect on Jan. 1, 2027. It applies to businesses that exchange, transfer, or store digital assets on behalf of customers in Illinois. Exchanges, custodians, brokers, and wallet providers carry the obligation to collect and remit the charge. Individual peer-to-peer transfers between wallets are not covered. A firm qualifies for the tax if it is based in Illinois or generates at least $100,000 in annual gross receipts from Illinois customers.
State officials project the tax will generate approximately $60 million in revenue, according to a person tracking the legislation. The same budget bill introduces new taxes on fantasy sports and social media platforms, according to ABC 7.
What the Tax Actually Covers
The Illinois Digital Chamber raised concerns about the law's scope before it passed. In a June 3 letter, the group said converting one digital asset into another, or moving assets into custodial storage, could trigger the 0.2% charge on the full value involved. The group noted this could apply regardless of whether the customer realized a gain or a loss.
NYU Stern School of Business adjunct professor Austin Campbell raised a separate concern on X. He said the bill's language may be broad enough to capture other forms of digital money beyond cryptocurrency, including electronic bank transfers.
Andreessen Horowitz Head of Policy and General Counsel Miles Jennings called the law one of the most anti-crypto measures passed in the United States. He said no state currently imposes a comparable transaction tax on the exchange, transfer, or custody of stocks, bonds, or derivatives. Jennings argued the legislation singles out digital assets for tax treatment not applied to other financial products.
The Crypto Council for Innovation, the Illinois Blockchain Association, and the Digital Chamber lobbied against the bill before it passed. The Crypto Council for Innovation sent a letter to Pritzker on June 16 asking him to issue a line item veto on the provision. Both chambers of the Illinois legislature are now out of session for the remainder of the year. A veto session is not scheduled until the fall.
One person following the matter said a legal challenge is the most likely route to changing or delaying the tax. Several entities have discussed filing lawsuits, though none had done so as of the law's signing. The new tax follows two bills Pritzker signed in 2025, the Digital Assets and Consumer Protection Act and the Digital Asset Kiosk Act. The Digital Chamber said those earlier bills reflected meaningful industry input.
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