Illinois lawmakers have approved a fiscal year 2027 budget that includes the Digital Asset Privilege Tax Act, a measure that would require digital asset brokers to collect a 0.2% tax on each transaction they handle. The provision reaches beyond trading profits. It applies to the full value of a transaction, covering swaps, transfers, and even movements of assets between wallets. The bill is not law yet and still needs the signature of Governor JB Pritzker.
A transaction tax, not a capital gains tax
The collection duty would fall on digital asset brokers, but the economic burden is expected to land on users. The source material gives a simple example: if someone swaps Bitcoin for a stablecoin, the tax would be charged on the full asset value involved in that move rather than on any profit. That changes the tax treatment in a meaningful way. A user could lose money on a trade and still owe the transaction tax, because the levy is tied to the act of transacting, not to realized gains.
State officials expect 60 million dollars a year
Backers of the measure believe the 0.2% rate could generate $60 million annually for Illinois. That revenue estimate appears to be a central argument behind the provision. Critics dispute the assumption. Their view is that if brokers and crypto businesses choose to leave the state because of the new tax and compliance burden, the taxable activity could shrink, weakening the revenue case that helped move the bill forward.
Missing registration deadline could bring felony exposure
The proposal also carries a compliance threat that goes beyond ordinary tax administration. According to the source, brokers that do not register by January 1 could face a Class 3 felony charge. For smaller crypto firms, that raises the stakes sharply. It is not just about paying or collecting tax; it is also about meeting a legal deadline with criminal consequences attached if they fail to comply.
Industry groups say the provision arrived without input
The Illinois Blockchain Association and The Digital Chamber sent a joint letter to lawmakers criticizing how the measure was added. Their complaint is procedural as much as substantive: they say there was no industry input, no public hearing, and no outreach to stakeholders before the tax language appeared. In their account, the provision was inserted overnight through a floor amendment to an unrelated bill, leaving the industry to discover it only after the fact. Their letter also says no other U.S. state currently imposes this kind of transaction-level privilege tax.
Federal discussions are moving on a different track
The source contrasts Illinois with activity in Washington. The House Ways and Means Committee released seven draft bills this week dealing with stablecoin tax treatment, mining rules, crypto lending, and wash sale rules. Cody Carbone of The Digital Chamber described those drafts as encouraging and said they could bring the rate clarity and fairness digital assets deserve. That makes the Illinois proposal stand out even more sharply in the current policy debate.
The next step rests with the governor
Governor Pritzker has not signed the budget measure yet. Industry groups are urging him to reject the crypto tax provision before it becomes permanent law. If he signs, crypto businesses in Illinois may need to decide whether to remain in the state under the new tax regime or move operations to a jurisdiction that does not charge each digital asset transaction they handle.