Illinois moves to tax crypto trades — with registration rules and felony penalties
The Illinois General Assembly has approved a provision that would impose a new tax on cryptocurrency transactions, tacked into the state’s $56 billion fiscal 2027 budget. The Digital Asset Privilege Tax Act — part of the 1,624‑page spending package passed largely along party lines — would levy a 0.2% tax on covered digital-asset transactions and requires any entity classified as a “digital asset broker” to register with the state before facilitating those trades.
Key details
- Tax rate: 0.2% on covered crypto transactions.
- Estimated revenue: roughly $60 million, according to state budget documents.
- Registration: digital asset brokers must register with Illinois to facilitate covered transactions.
- Criminal penalties: brokers who operate without registering after Jan. 1 (per the bill) could face Class 3 felony charges — penalties in Illinois for that class run from two to five years in prison and fines up to $25,000.
- Next step: the measure now awaits Gov. J.B. Pritzker’s signature; the governor has indicated he intends to sign the budget.
Pushback from industry groups
The Digital Chamber and the Illinois Blockchain Association quickly criticized the tax, urging officials to reject it. In a joint letter and follow-up posts on X, the groups argued the tax was introduced without meaningful consultation, would hurt local innovation and adoption, and noted that no other U.S. state currently imposes a similar transaction tax. Critics also objected to the measure’s route to passage — embedded within a huge budget bill rather than debated as standalone legislation — and said stakeholders received little advance notice.
Where this fits in the broader regulatory picture
Illinois’ move comes as both state and federal policymakers intensify scrutiny of digital assets. Earlier this year Gov. Pritzker signed Executive Order 2026‑04, barring state employees from using nonpublic information to trade in prediction markets; New York issued a similar order (Executive Order 60) around the same time. At the federal level, the House Ways and Means Committee released seven discussion drafts on June 5 covering topics such as stablecoin payments, staking rewards, mining income, DeFi lending, wash-sale rules, charitable donations, and voluntary disclosure programs — items slated for discussion in a June 9 hearing and drawing from proposals in the PARITY Act and legislation backed by Sen. Cynthia Lummis.
What’s next
If Gov. Pritzker signs the budget as expected, Illinois will join a growing list of states experimenting with new crypto rules and revenue mechanisms. Industry groups and lawmakers are likely to continue pushing and debating implementation details, registration requirements, and the potential legal consequences for firms that fail to comply.
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