Illinois Lawmakers Approve Crypto Transaction Tax, Bill Heads to Gov. Pritzker's Desk

Illinois lawmakers have approved a budget package that would introduce a new tax on cryptocurrency transactions and require digital asset brokers operating in the state to register, according to CoinDesk. The measure now awaits the signature of Governor JB Pritzker. The proposal, dubbed the Digital Assets Privilege Tax Act, would levy a 0.2% tax on covered crypto transactions. The tax is incorporated into Illinois' $56 billion fiscal 2027 budget plan, with state budget documents projecting roughly $60 million in annual revenue. The bill also creates a registration requirement for entities classified as digital asset brokers before they can facilitate such transactions. Operating without registration would be subject to criminal enforcement. If firms continue operating after January 1 next year without registering, they could face third-degree felony charges in Illinois. Under state law, a third-degree felony can carry 2 to 5 years in prison and fines of up to $25,000. The criminal penalty provision has drawn sharp criticism from the crypto industry. Following passage, the Digital Chamber and the Illinois Blockchain Association issued a joint letter urging the governor to veto the measure, arguing it would undermine the growth of local digital asset businesses. The groups also said the provision was added to the budget without sufficient consultation with industry stakeholders and noted that other U.S. states do not currently impose a comparable crypto transaction tax. Opponents have also questioned the legislative process, pointing out that the tax was not debated as a standalone bill and was instead folded into a 1,624-page budget package. The Illinois move comes as scrutiny of digital asset taxation and regulation intensifies nationwide. At the federal level, the U.S. House Committee on Ways and Means on June 5 released seven discussion drafts addressing stablecoin payments, staking rewards, mining income, DeFi lending, wash-sale rules, charitable donations, and voluntary disclosure programs. The committee said the drafts will be discussed at a June 9 hearing, with portions drawing on the earlier PARITY Act and other proposals associated with Sen. Cynthia Lummis. Governor Pritzker has previously indicated he intends to sign the budget bill. If enacted, Illinois would become one of the few U.S. states to impose a separate crypto transaction tax paired with criminal penalties.