Pritzker signs Illinois budget with 0.2% crypto tax

Illinois Governor JB Pritzker signed a $55.9 billion state budget on Tuesday that incorporates a 0.2% “privilege tax” on digital asset transactions conducted on registered platforms as part of Senate Bill 3019, Article 3. The provision becomes effective in the state’s fiscal 2027 budget.

The law requires digital asset brokers operating in Illinois to register with state authorities and to meet new reporting and compliance obligations. The tax applies to transactions classified as “digital asset business activity” on registered platforms and is imposed regardless of whether a user realizes income, gains or profit. State officials estimate the measure will raise more than $800 million for the fiscal 2027 budget.

Tax advisers at BDO USA said the levy could apply to companies based outside Illinois if they have sufficient customer activity in the state. Implementing rules, including registration processes and timelines, will be developed by state agencies after the law takes effect.

Industry groups sought a veto or a line-item removal of Article 3. The Crypto Council for Innovation wrote in a letter to the governor that the provision would “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.” The Digital Chamber of Commerce sent a June 3 letter opposing the measure on similar grounds.

Miles Jennings, head of policy and general counsel for a16z Crypto, posted on social media that the statute was “one of the most anti-crypto laws in the US,” and that there is effectively no comparable state financial transaction tax on stocks, bonds or derivatives.

Supporters in the state described the provision as a revenue measure paired with registration and compliance rules intended to monitor sector activity and fund state programs. Firms and advisers have noted the law comes as the industry faces proposed federal rules, including the Digital Assets and Consumer Protection Act, and congressional work on national tax guidance for crypto assets.

Legal and tax advisers expect the measure to draw legal scrutiny, though no court challenges have been filed. Illinois is now the only U.S. state to impose a statewide transaction-based levy specifically targeted at digital asset activity.