Illinois Approves Crypto Tax Despite Strong Industry Opposition

TLDR

• Illinois Governor JB Pritzker signed a budget bill that includes a 0.2% crypto transaction tax.
• The new crypto tax will take effect on January 1, 2027.
• The measure applies to digital asset transactions involving Illinois residents.
• Illinois became the first US state to impose a tax on digital asset transactions regardless of gains or income.
• Digital asset brokers operating in Illinois must register and comply with new reporting requirements.
• The Crypto Council for Innovation and Digital Chamber opposed the legislation before its approval.

Illinois has approved a new crypto tax as part of its fiscal 2027 budget package. Governor JB Pritzker signed the $55.9 billion spending plan on Tuesday despite opposition from digital asset groups. The measure will impose a 0.2% transaction tax on certain digital asset activity starting January 1, 2027.

Illinois Moves Forward With Crypto Tax Plan

The new law applies a 0.2% charge to digital asset transactions involving Illinois residents. It covers activity conducted through registered platforms that engage in digital asset business operations. The provision forms part of a broader revenue package tied to the state’s fiscal 2027 budget.

State officials included the measure in Senate Bill 3019. The budget package aims to generate more than $800 million in new tax revenue. Governor Pritzker approved the legislation despite calls for changes from industry organizations.

The Crypto Council for Innovation opposed the proposal before the signing. The group urged the governor to remove Article 3 from the bill through a line-item veto. However, the governor approved the budget with the provision intact.

The organization said the law creates an unusual tax structure for digital asset users. It argued that the measure could place additional costs on Illinois residents. The group also claimed the law could discourage blockchain-related activity within the state.

It also said the measure could drive innovation and builders from Illinois. The organization delivered its objections shortly before the governor signed the bill.

Industry Groups Challenge Illinois Crypto Tax Framework

The Digital Chamber also opposed the legislation before its approval. In a June 3 letter, the organization criticized the Digital Asset Privilege Tax Act. It argued that the proposal could discourage digital asset adoption as financial services move onto blockchain networks.

The group said the measure could affect Illinois-based blockchain businesses. It also warned that companies could reconsider operations in the state.

Illinois hosts several digital asset firms, including Zero Hash, Jump Crypto, Bitnomial, and Apex Crypto. Tax advisers at BDO USA said the law could also affect firms outside Illinois. The impact may extend to businesses with enough customer activity in the state.

Miles Jennings, head of policy and general counsel at a16z Crypto, criticized the measure on X. He described the law as one of the most anti-crypto policies enacted by a US state. Jennings argued that comparable taxes do not apply to stocks, bonds, or derivatives.

He added that crypto assets were being treated differently under the law. The tax will take effect on January 1, 2027, alongside new registration and reporting requirements for digital asset brokers.

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