Illinois enacts 0.2% tax on crypto transactions

Governor J.B. Pritzker signed the Digital Asset Tax Act into law as part of Illinois’ 2027 budget. The statute imposes a 0.2% tax on transfers and purchases of digital assets and takes effect Jan. 1, 2027.

The tax applies to activity conducted in Illinois and to individuals who have a “place of primary use” in the state. Digital asset brokers, including cryptocurrency exchanges that operate in Illinois, are required to collect the levy from customers and remit it to state tax authorities.

State budget documents and the Illinois Policy Institute project the tax could generate about $60 million in revenue next year.

The Crypto Council for Innovation, a coalition of industry participants, wrote to Governor Pritzker that the measure “would position Illinois as the only state in the country to punitively tax Illinois customers for simply receiving covered digital asset business activity,” and called it the “most punitive digital asset tax” in the country.

The coalition added the law “will create an unprecedented tax regime that disproportionately burdens Illinois residents for simply using digital assets, and will drive innovation and builders out of the state.”

Industry groups and taxpayer advocates criticized the legislative process, saying affected parties did not have a formal opportunity to provide input before the bill was enacted. Supporters framed the tax as a revenue source for the state’s 2027 fiscal year.

At the federal level, several new crypto tax bills introduced in Congress this month address topics such as the tax treatment of mining and staking and a possible de minimis exemption. Those measures drew debate in a recent House committee hearing, where members expressed differing views on the scope and timing of federal rules.

The law creates a transaction-based tax category that is uncommon among states, where most crypto tax regimes focus on income, capital gains or sales taxes. Illinois tax authorities are expected to publish implementing rules and compliance guidance in the months ahead of the law’s Jan. 1, 2027 effective date.