Illinois Crypto Tax Proposal Moves Closer to Becoming Law

Illinois is one step away from introducing a new tax on cryptocurrency transactions after state lawmakers approved a $56 billion budget package for fiscal year 2027. The measure is included in Senate Bill 3019, which passed the Illinois General Assembly earlier this week and now awaits the signature of Governor JB Pritzker.

If signed into law, the proposal would impose a 0.2% tax on digital asset transactions conducted in the state. The tax would be collected by registered digital asset brokers responsible for facilitating crypto sales and related business activity.

Digital Asset Brokers Face New Compliance Rules

The legislation also introduces registration requirements for firms operating as digital asset brokers in Illinois. Under the proposed Digital Asset Privilege Tax Act, brokers that fail to comply with registration and reporting rules beginning Jan. 1 could face serious penalties.

Violations may be treated as a Class 3 felony under state law, carrying potential prison sentences of two to five years and fines of up to $25,000.

Industry Groups Oppose the Measure

The proposal has drawn criticism from crypto industry organizations, including the Digital Chamber and the Illinois Blockchain Association. The groups argue that the tax was added to a large budget bill without meaningful consultation with industry stakeholders.

Opponents say no other U.S. state currently applies a similar tax on digital asset transactions and warn that the measure could discourage innovation and investment in the sector.

State Expects Millions in Additional Revenue

Illinois lawmakers estimate the crypto tax could generate approximately $60 million in revenue for the state. Governor Pritzker has publicly indicated support for the broader budget package and is expected to sign the legislation, which would make the crypto tax law.