Illinois’ Department of Revenue has released draft rules for the state’s enacted 0.2% tax on digital asset transactions, spelling out which crypto activities would fall inside or outside the tax base. The proposal says stablecoins would be treated as taxable digital assets, while non-fungible tokens would be excluded.
The draft also draws lines around DeFi activity. DeFi transactions would generally be exempt, but fees paid by users that are deemed "valuable consideration" could still trigger the tax. That includes protocol fees used to operate or maintain a platform. By contrast, network fees and swap fees paid only to liquidity providers would not be taxed.
The document says crosschain bridging conducted through a digital asset broker in exchange for consideration would count as a taxable exchange. It also says transfers from centralized exchanges to self-custody wallets could be taxed if the exchange charges a fee. The law was approved in June and is scheduled to take effect on Jan. 1, 2027. Illinois tax authorities are accepting public comments on the draft through Oct. 30, according to Cointelegraph.
Illinois’ Department of Revenue has issued draft rules for the state’s enacted 0.2% tax on digital asset transactions, stating that stablecoins would be treated as taxable digital assets, while non-fungible tokens, or NFTs, would fall outside the tax.
The draft says DeFi transactions would generally qualify for an exemption. Still, fees paid by users that are considered "valuable consideration" may trigger taxation, including protocol fees used for the operation or maintenance of a platform. Network fees and swap fees paid only to liquidity providers would not trigger the tax.
The proposal also says crosschain bridging carried out through a digital asset broker in exchange for consideration would be treated as a taxable exchange activity. Transfers from centralized exchanges to self-custody wallets may also be taxed if the exchange charges a fee.
The tax law was approved in June and is set to take effect on Jan. 1, 2027. The Illinois Department of Revenue is taking comments on the draft through Oct. 30, according to Cointelegraph.
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