- Illinois’ new crypto tax will charge a 0.2% levy on transactions, raising costs for users and digital asset firms.
- Industry leaders warn the law could hurt innovation by taxing crypto activity without considering profits or losses.
- The measure aims to raise $60 million yearly but faces criticism over its broad scope and legal uncertainty.
Illinois has approved a new tax on digital asset transactions, creating fresh costs for cryptocurrency users and businesses operating in the state.
Governor J.B. Pritzker signed the measure into the state’s 2027 budget on June 16. Starting Jan. 1, 2027, digital asset firms serving Illinois residents could face a 0.2% tax on crypto-related transactions, including trading, transfers, and custody services. The tax is based on the value of a transaction rather than any profit earned from it.
The measure drew criticism from parts of the crypto industry. Bull Theory wrote, “BREAKING: Illinois just passed a law that taxes you every time you buy, sell it or move your crypto.” The account added that a $10,000 Bitcoin purchase, transfer, and sale could result in a total of $60 in taxes.
State officials estimate the new levy will generate about $60 million in annual revenue.
Industry Groups Push Back
The Digital Asset Tax Act applies to a wide range of cryptocurrency services, including the exchange, transfer, and custody of digital assets on behalf of customers. The law covers companies based in Illinois as well as firms that generate at least $100,000 a year from Illinois users.
Industry groups have pushed back against the measure, arguing that it treats digital assets differently from traditional financial products. According to the Crypto Council for Innovation, “Unlike traditional tax frameworks that are tied to income, gains or profits, this law would impose a 0.2% tax on everyday customers’ use of digital asset services such as exchange, transfer or custody activities.”
The organization said no comparable tax applies to stock or bond transactions and described the measure as “the most punitive digital asset tax in the country.”
Criticism has also come from prominent figures in the crypto industry. In a June 17 post, Michael Saylor called the decision a “Big Mistake.”
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Legal Questions Remain Unanswered
Legal and industry experts say the new tax could create uncertainty for digital asset businesses and investors. Austin Campbell warned that the legislation’s broad language may extend beyond cryptocurrencies and affect other forms of digital money.
Tax and advisory firm BDO also noted that out-of-state brokers could fall within the law’s scope, with customer addresses and IP data potentially used to determine tax liability.
Questions also remain about how the tax would apply in practice. Crypto litigator Joe Carlasare raised concerns about wallet transfers, asking whether moving Bitcoin to Coinbase before a sale would count as one taxable event or two.
For now, opportunities to revise the measure appear limited. Illinois lawmakers have concluded their regular legislative session, leaving legal challenges as one of the few remaining options for opponents. Several industry groups have discussed potential lawsuits, though no cases have been filed.
The debate has also drawn attention from policy advocates. Miles Jennings of Andreessen Horowitz Crypto said Illinois’ earlier digital asset legislation provided a constructive framework for the industry. However, he described the new tax as “one of the most anti-crypto laws in the U.S.”
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