Illinois Legislature Approves 0.2% Crypto Transaction Tax, Broker Registration Rules

Illinois lawmakers have approved language that would impose a new tax on cryptocurrency transactions and add registration requirements for firms facilitating those trades, as part of the state's $56 billion fiscal 2027 budget. The measure, titled the Digital Asset Privilege Tax Act and included in the 1,624-page spending package passed largely along party lines, would apply a 0.2% levy to covered digital-asset transactions. State budget documents estimate the tax could generate about $60 million. The bill also requires entities defined as "digital asset brokers" to register with the state before facilitating covered transactions. Brokers operating without registration after Jan. 1, under the bill's terms, could face Class 3 felony charges. In Illinois, Class 3 felony penalties generally range from two to five years in prison and fines of up to $25,000. The provision now awaits Gov. J.B. Pritzker's signature. The governor has said he intends to sign the budget. Industry groups push back The Digital Chamber and the Illinois Blockchain Association quickly condemned the proposal, urging state officials to reject it. In a joint letter and follow-up posts on X, the groups said the tax was introduced without meaningful consultation, would undermine local innovation and adoption, and argued that no other U.S. state currently levies a comparable transaction tax. They also criticized the legislative path, noting the policy was folded into a large budget bill rather than debated as standalone legislation, and said stakeholders received limited advance notice. Broader regulatory backdrop Illinois' move comes as state and federal policymakers step up oversight of digital assets. Earlier this year, Pritzker signed Executive Order 2026-04, which bars state employees from using nonpublic information to trade in prediction markets. New York issued a similar directive, Executive Order 60, around the same time. At the federal level, the House Ways and Means Committee released seven discussion drafts on June 5 covering stablecoin payments, staking rewards, mining income, DeFi lending, wash-sale rules, charitable donations, and voluntary disclosure programs. The topics are slated for discussion at a June 9 hearing and draw on proposals in the PARITY Act and legislation backed by Sen. Cynthia Lummis. What to watch If Pritzker signs the budget as expected, Illinois would add a new revenue mechanism tied to crypto activity and expand compliance obligations for firms operating in the state. Industry groups and lawmakers are likely to continue debating implementation details, registration standards, and potential legal exposure for companies that fail to comply.