Crypto Industry Pushes Back as Illinois Adds Tax on Digital Asset Transfers and Holdings

The crypto industry is strongly opposing a new Illinois tax law that imposes a 0.2% levy on businesses that transact or store digital assets for customers in the state, though there is limited expectation that it can be changed in the near term.

According to the bill text, the law introduces a 0.2% charge on “receiving any digital asset business activity,” defining such activity as any instance of exchanging, transferring, or storing digital assets on behalf of customers or as part of a business service.

The tax applies to companies based in Illinois, as well as firms serving Illinois residents, provided they have at least $100,000 in gross receipts. One person familiar with the process said it is projected to generate around $60 million in revenue.

The provision was reportedly added at the last minute to the broader state budget and was signed into law by Governor J.B. Pritzker on June 16. The overall budget totals about $56 billion for the 2027 fiscal year and also includes additional taxes on areas such as fantasy sports and social media.

Some observers have noted the legislation may extend beyond crypto specifically, potentially capturing broader digital payment activity such as electronic bank transfers.

It remains uncertain whether any changes can be made soon, as the Illinois legislature is out of session for the remainder of the year. A possible veto session in the fall could provide a narrow window for revisions, though any action by the governor remains unclear. The tax is set to take effect on January 1, 2027.

Critics argue the measure effectively imposes a transaction-style tax on everyday digital asset usage and unfairly singles out crypto compared with traditional financial instruments like stocks and bonds, which are not subject to similar state-level transfer taxes.

Industry stakeholders say legal action may be the most likely route to challenge or modify the tax, with discussions already underway, though no lawsuits have been filed yet.

The development also comes amid recent political tensions in the state, following significant crypto industry spending in Illinois’ Democratic Senate primary, where the industry backed Rep. Raja Krishnamoorthi against the governor’s preferred candidate, Juliana Stratton, who ultimately won.

Advocacy group Stand With Crypto, supported by Coinbase, has also criticized Stratton’s stance on digital assets, assigning her a low rating based on past remarks about crypto political spending.

Overall, the tax contrasts with earlier Illinois legislation seen as more supportive of blockchain innovation, with critics describing the new measure as one of the most aggressive anti-crypto tax policies introduced in the U.S. so far.