Illinois Governor JB Pritzker has signed a first-of-its-kind 0.2% tax on digital asset transactions into law, drawing immediate opposition from crypto companies and policy groups. The measure
Illinois Governor JB Pritzker has signed a first-of-its-kind 0.2% tax on digital asset transactions into law, drawing immediate opposition from crypto companies and policy groups.
The measure was enacted inside Illinois’ $55.9 billion fiscal 2027 budget package on June 16. The Digital Asset Tax Act will take effect on January 1, 2027, covering digital asset exchanges, transfers, storage and wallet services handled for customers by qualifying brokers.
Unlike a capital-gains tax, the levy is based on the gross value of the digital assets involved rather than the profit earned. A covered $10,000 transaction would therefore generate a $20 state tax even when the customer realizes no investment gain.
The law does not create a blanket charge on every transaction broadcast directly between two self-custody wallets. Its collection system is built around digital asset brokers, including exchanges, custodians and other companies that exchange, transfer or store assets for customers.
However, the legislation contains no broad exemption for moving crypto between a customer’s own accounts when a covered exchange, custodian or wallet provider facilitates the transfer. A withdrawal from an exchange account to a personal wallet, or a broker-handled transfer between wallets owned by the same user, may therefore fall within the taxable activity.
Customers legally owe the charge, while brokers must add it as a separate line item, collect it and remit it to the Illinois Department of Revenue. Providers must also register with the state and submit monthly reports covering their taxable activity.
Out-of-state platforms are not automatically excluded. A broker with at least $100,000 in annual receipts from Illinois customers can fall under the law even without a physical office in the state. Customer location may be determined through account records, mailing addresses, IP addresses and other indicators of primary use.
The Crypto Council for Innovation described the measure as “the most punitive digital asset tax in the country,” warning that it could increase costs for ordinary users and encourage companies to leave Illinois.
The organization objected to taxing the use of blockchain-based services rather than income or realized gains. Traditional stock, bond and derivatives transactions do not face an equivalent Illinois levy based solely on the value exchanged, transferred or held through a broker.
Illinois expects the crypto provision to generate approximately $60 million annually. The revenue target places the state on a different path from Washington’s ongoing effort to build a national market framework through the CLARITY Act, where lawmakers remain divided over custody, non-custodial software and the responsibilities of financial intermediaries.
The state tax also arrives as governments gain greater visibility into customer activity through exchange and wallet reporting. India’s issuance of more than 44,000 crypto tax notices shows how transaction-level platform data can move quickly from reporting infrastructure into enforcement.
Exchanges and custodians serving Illinois residents now have until January 1 to build registration, geolocation, billing and monthly reporting systems. For users, the cost will depend on how platforms interpret transfers, custody activity and wallet services before the first taxable transactions are processed in 2027.
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