Illinois Approves 0.2% Crypto Tax Under New $55.9 Billion State Budget

Highlights:

• Illinois approved a 0.2% tax on digital asset transactions that will take effect on Jan. 1.
• The Illinois crypto tax requires brokers to collect the tax and submit monthly reports.
• Crypto industry groups argue the new tax treats digital assets differently from stocks and derivatives.

Illinois has imposed a 0.2% tax on digital asset transactions through its new fiscal 2027 budget. Governor JB Pritzker signed the $55.9 billion spending plan after lawmakers approved Senate Bill 3019. The measure creates a Digital Asset Privilege Tax that applies to digital asset business activity. The tax covers exchanges, transfers, custody services, and digital wallet activity.

🔔 Illinois Governor Pritzker signs digital asset tax into law, Crypto supporters say this could force developers and businesses to leave the state. pic.twitter.com/T0RJWYHyzG

— Crypto Dyl News (@cryptodylnews) June 17, 2026

The Illinois crypto tax will take effect on Jan. 1, 2027. Earlier budget estimates showed the tax could generate about $60 million in annual revenue. Illinois lawmakers included the digital asset tax in a budget package that aims to raise more than $800 million in new revenue.

The Illinois law taxes each covered digital asset transaction instead of taxing profits or capital gains from investments. Illinois residents can owe the 0.2% tax when they use covered digital asset services, even if the transaction produces no profit. The new law makes Illinois one of the first states to impose a broad transaction-level tax on digital asset activity.

Illinois Crypto Tax Expands Compliance Duties for Brokers

The law requires digital asset brokers to register with the Illinois Department of Revenue before conducting covered activity. Each registration remains valid for one year. The state will automatically renew registrations unless a broker cancels registration or officials revoke it.

Brokers must collect the 0.2% crypto tax from Illinois customers as a separate line item. Customers legally owe the tax to the service provider. Brokers must maintain records of covered transactions and customer activity. They must also file monthly reports covering activity from the previous month.

The law also applies to out-of-state digital asset brokers that generate at least $100,000 annually from Illinois customers. The provision allows Illinois regulators to tax qualifying digital asset activity even when the broker operates outside Illinois.

Illinois regulators can use account records, mailing addresses, IP addresses, and customer location data to determine taxable activity. The law allows regulators to rely on other information when identifying the primary location of use.

Industry Groups Warn of Competitive Risks and Uneven Treatment

The Crypto Council for Innovation asked Pritzker to issue a line-item veto before signing the budget. The organization argued that the tax would drive innovation, investment, and blockchain businesses out of Illinois. The Crypto Council for Innovation also argued that lawmakers singled out digital assets because transactions use blockchain technology. The group compared the tax approach to taxing correspondence because someone sends it through email instead of traditional mail.

Illinois Governor Pritzker just signed the most punitive digital asset tax in the country into law.

This 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… pic.twitter.com/mYdcMjtA2i

— Crypto Council for Innovation (@crypto_council) June 16, 2026

The Digital Chamber opposed the measure in a separate letter. The organization warned that the tax could discourage digital asset use as more financial services move onto blockchain networks. The Illinois Blockchain Association also opposed the proposal. Both organizations said lawmakers gave the industry little advance notice before approving the measure.

Miles Jennings, head of policy and general counsel at a16z Crypto, criticized the law after lawmakers approved it.

He stated:

“This is one of the most anti-crypto laws in the U.S. There is effectively no comparable state financial transaction tax on stocks, bonds, or derivatives anywhere in the country. When states adopt discriminatory, asset-specific taxes that drive builders and users elsewhere, we all lose.”

The issue affects Illinois-based crypto companies, including Zero Hash, Jump Crypto, Bitnomial, and Apex Crypto, which could face the new compliance requirements.