The crypto industry is pushing back against a new Illinois law that introduces a 0.2% tax on businesses involved in transacting or storing digital assets for customers, though officials reportedly see little chance of near-term changes.
The legislation imposes a 0.2% charge on “receiving any digital asset business activity,” which it defines as any instance of exchanging, transferring, or holding digital assets on behalf of clients or as part of a business service.
It applies to firms based in Illinois, as well as those serving state residents, provided they generate at least $100,000 in gross receipts. One person familiar with the process said the measure is expected to raise roughly $60 million in revenue.
The provision was added late in the drafting of Illinois’ broader budget bill and was signed by Governor J.B. Pritzker on June 16. The budget totals around $56 billion for fiscal year 2027 and also introduces new taxes on sectors such as fantasy sports and social media.
Some analysts note the wording may extend beyond crypto itself, potentially covering broader financial activity such as electronic bank transfers.
Whether the law can be amended soon remains unclear, as the state legislature is out of session for the rest of the year. A fall veto session could offer a limited opportunity for changes, but it is uncertain if any revisions will be pursued. The tax is scheduled to take effect on January 1, 2027.
Industry critics argue the policy effectively taxes everyday use of digital asset services and unfairly targets crypto compared with traditional assets like stocks and bonds, which do not face similar transaction-based state taxes.
Some industry participants believe legal challenges may be the most viable path to altering or blocking the measure, with discussions reportedly underway but no lawsuits yet filed.
The move also comes after significant crypto-related political spending in Illinois’ Democratic Senate primary, where the industry backed Rep. Raja Krishnamoorthi over Governor Pritzker’s preferred candidate, Juliana Stratton, who ultimately won the nomination.
Crypto advocacy group Stand With Crypto, backed by Coinbase, has also criticized Stratton’s digital asset stance, assigning her a low rating based on past comments about crypto-related campaign activity.
Overall, the tax marks a shift from Illinois’ earlier blockchain-friendly legislation, with critics calling the new measure one of the most restrictive crypto tax policies enacted in the United States to date.
