Illinois Lawmakers Advance 0.2% Crypto Transaction Tax, JB Pritzker Awaits Signature

Illinois lawmakers advanced a crypto transaction tax in the state’s fiscal 2027 budget, with a Senate bill proposing a 0.2% tax on crypto transactions to be imposed by the “digital asset broker making or effectuating the sale of the digital asset business activity.”

“Cryptocurrency trade groups are asking Illinois Gov”

Bloomberg Industry

The measure, described as a “privilege tax” within the Digital Asset Privilege Tax Act amendment, would require entities operating as digital asset brokers in Illinois to register and would have brokers withhold the tax from Illinois customers.

Bloomberg Industry

Brokers who failed to follow the guidelines from Jan. 1 could be found guilty of a Class 3 felony, subject to a prison sentence of two to five years and fines up to $25,000.

Lawmakers expect the crypto tax to generate $60 million for the state, and the budget bill still needs Governor JB Pritzker’s signature before becoming law.

Pritzker made public statements signaling he plans to sign the bill soon, but had not done so as of Friday morning.

Industry groups and advocates are pushing back against the Digital Asset Privilege Tax Act amendment, arguing it would damage crypto users and the broader sector.

The Digital Chamber and Illinois Blockchain Association penned a letter on Wednesday urging the state to reject the Digital Asset Privilege Tax Act, claiming it would be “economically destructive” and gave the industry no notice of its intentions.

bloomingbit

In a Thursday X post, The Digital Chamber said, “No other state has imposed a similar tax, and the lack of stakeholder engagement surrounding this proposal raises significant concerns.”

Bloomberg Industry described the proposal as a first-in-the-nation levy and quoted cryptocurrency trade groups asking Gov. J.B. Pritzker to pull the transaction tax, calling it “substantively unsound, procedurally deficient, and economically destructive.”

The Chicago Tribune also framed the measure as a new 0.2% levy on crypto and other digital currencies traded through brokers, with brokers required to register with the Illinois Department of Revenue and collect the tax from Illinois customers.

If signed, the Illinois budget package would add the 0.2% crypto levy beginning Jan. 1, and it would require brokers to register with the Illinois Department of Revenue and collect the tax from Illinois customers.

“In the face of state gaming regulators battling prediction market firms, Illinois is taking a different approach by attempting to tax the industry”

Card Player

Under the measure described by the Chicago Tribune, if a broker doesn’t collect the tax from a customer, the purchaser would be responsible for paying the tax by the 20th day of the following month.

The bill’s path also intersects with Illinois’ broader approach to prediction markets, after Pritzker signed an executive order on April 21 banning state employees from betting on prediction market event contracts with companies such as Kalshi and Polymarket.

Card Player said the crypto tax move is part of a wider SB 3019 package and that the prediction market portion could bring more legal wranglings, including the Commodity Futures Trading Commission’s position that it should solely regulate the industry at the federal level.

For now, the budget bill remains headed to Pritzker’s desk, and the crypto tax provision is still one step away from becoming law pending his signature.