Illinois Governor J.B. Pritzker has signed a budget bill establishing a first-of-its-kind 0.2% "privilege tax" on all crypto transactions, effective Jan. 1, 2027. Industry groups like the Crypto Council for Innovation have condemned it as the "most anti-crypto law in the U.S.," arguing it will drive innovation out of the state and unfairly singles out digital assets compared to stocks or bonds.
Illinois crypto transaction tax
- ▪The "Digital Asset Privilege Tax Act," which is Article 3 of the bill, will take effect on January 1, 2027
- ▪The tax is part of a larger package intended to close a budget gap and help raise over $800 million in new tax revenue for fiscal year 2027
- ▪Illinois Governor J.B. Pritzker signed a $55.9 billion state budget bill (SB 3019) that includes a 0.2% "privilege tax" on crypto transactions
Industry opposition arguments
- ▪The CCI warned the law will create an "unprecedented tax regime" that will drive innovation and builders out of Illinois
- ▪Industry groups, including the Crypto Council for Innovation (CCI), have labeled the legislation as the "most anti-crypto law in the U.S."
- ▪The Digital Chamber also opposed the tax, arguing it would push existing blockchain and crypto companies out of the state
- ▪The CCI compared the tax to "taxing correspondence because it is delivered by email rather than by post."
Impact on Illinois crypto companies
- ▪The tax framework contains no exemptions for common non-commercial activities, such as moving funds between personal wallets
- ▪Out-of-state companies with sufficient customer activity in Illinois could also be impacted by the tax
- ▪Illinois is home to several crypto companies, including Zero Hash, Jump Crypto, Bitnomial, and Apex Crypto
Comparison to traditional finance taxation
- ▪Miles Jennings argued that the tax singles out crypto in a way that likely violates several federal laws
- ▪Legal expert Miles Jennings stated there is no comparable state financial transaction tax on stocks, bonds, or derivatives anywhere in the country
- ▪Illinois will become the only state to tax digital asset users regardless of their income, gains, or profits
Story comments
Loading comments…