Illinois is moving ahead with a new tax framework for digital assets that would impose a 0.2% levy on certain crypto-related transactions beginning in 2027. The Illinois Department of Revenue
Illinois is moving ahead with a new tax framework for digital assets that would impose a 0.2% levy on certain crypto-related transactions beginning in 2027.
The Illinois Department of Revenue published proposed rules on September 28, outlining how the Digital Asset Tax Act would work. The rules cover digital asset exchanges, transfers, and custodial storage that businesses provide on behalf of customers.
Under the framework, the tax would apply from January 1, 2027, at 0.2% of the value of the digital asset involved in a qualifying transaction. Digital asset brokers would collect the levy from customers and send the money to the state.
Notably, the rules cover activities such as buying and selling digital assets, converting fiat currency into crypto, converting crypto back into fiat and certain blockchain-to-blockchain transactions. Transfers carried out through brokers can also fall within the tax.
However, the proposal does not treat every crypto transaction the same way. The rules exclude direct peer-to-peer transfers that do not involve an intermediary and do not involve valuable consideration.
Illinois is not the only state considering additional taxes on the crypto industry. In August 2025, New York lawmakers introduced A8966, a proposal that would establish a 0.2% excise tax on digital asset transactions, including the sale or transfer of digital assets. The bill was referred to the Assembly Ways and Means Committee and remains a proposal, not enacted law.
Unlike Illinois’ measure, the New York proposal specifies that revenue would support the expansion of substance-abuse prevention and intervention programs in upstate schools.
New York also considered a separate tax targeting energy-intensive crypto mining.
In October 2025, lawmakers introduced S8518, which would impose an excise tax on electricity consumed by proof-of-work digital asset mining operations. Lawmakers later introduced a companion Assembly bill, A9138, that month. Both remain in committee.
The proposed tax would use a tiered structure. Mining operations using more than 2.25 million kilowatt-hours annually would face rates ranging from 2 cents to 5 cents per kilowatt-hour, depending on consumption. The proposal would apply to taxable years beginning January 1, 2027.
The issue returned to the spotlight in March 2026, when New York lawmakers included the crypto-mining tax in the Assembly’s one-house budget proposals. The proposal was estimated to generate $95 million beginning in 2027 and $380 million annually through 2030, according to the material provided. Industry groups opposed the measure, arguing that other power-intensive industries were not being targeted in the same way.
Besides Illinois and New York, states including Maryland, Pennsylvania, Arkansas, Montana, Kentucky, and Washington have introduced taxes on cryptocurrency or digital-asset activities. Most proposals have focused on crypto mining, energy consumption, or digital-asset businesses, rather than a direct tax on ordinary crypto transactions.
