A last-minute addition to Illinois’ state budget introduces a 0.2% tax on digital asset business activity, a move that industry sources say is unlikely to be reversed in the near term.
The provision imposes the levy on companies that exchange, transfer, or custody digital assets on behalf of customers. It applies to firms operating in Illinois or serving residents of the state with at least $100,000 in gross receipts, and is expected to generate around $60 million in revenue.
According to people familiar with the process, the measure was inserted late in budget negotiations and signed into law by Governor J.B. Pritzker on June 16. It is part of a broader $56 billion fiscal year 2027 budget that also includes new taxes on areas such as fantasy sports and social media.
The crypto industry has pushed back strongly, arguing the policy unfairly targets digital asset firms. Some legal and academic observers have also questioned whether the language could extend beyond crypto to broader forms of digital financial transfers, including certain banking transactions.
With the Illinois legislature out of regular session for the remainder of the year, opportunities for immediate changes appear limited. A fall veto session could provide a potential opening for revisions, though it remains uncertain whether Governor Pritzker would use a line-item veto. The tax is set to take effect on January 1, 2027.
Industry groups, including the Crypto Council for Innovation, argue that the tax imposes a transaction-style charge not applied to comparable financial instruments like stocks or bonds, effectively singling out crypto. They warn it could distort competition within the financial sector.
Some stakeholders say legal action may be the most likely route to challenge the policy, although no lawsuits have been filed yet.
The measure comes against a politically charged backdrop in Illinois, following a closely watched Senate primary in which the crypto industry spent heavily supporting a candidate opposing Governor Pritzker’s preferred choice, Lieutenant Governor Juliana Stratton, who ultimately won.
Crypto advocacy group Stand With Crypto, backed by Coinbase, had previously given Stratton a poor rating on digital asset policy, citing her public criticism of crypto-funded political spending.
The new tax stands in contrast to Illinois’ earlier, more industry-friendly blockchain legislation, with critics calling the latest provision one of the most aggressive crypto tax measures enacted in the United States.
