Illinois Cryptocurrency Transaction Tax Awaits Final Approval in FY2027 Budget
Illinois legislators have approved a budget measure requiring registered brokers to collect a 0.2% levy on cryptocurrency transactions, with only the governor's signature needed for enactment.
Advocates representing the digital asset sector are voicing opposition to a specific provision within a $56 billion budget for the state that Illinois General Assembly members approved this past Monday, citing concerns about its effects on cryptocurrency holders.
Within a Senate bill incorporated into Illinois' fiscal year 2027 state budget, legislators have put forward a 0.2% levy on cryptocurrency transactions, which would be collected by the "digital asset broker making or effectuating the sale of the digital asset business activity." The legislation, spanning 1624 pages and forming part of the revenue and taxation package designed to finance the state's 2027 budget, received approval along party lines during the early hours of Monday.
The provision, characterized as a "privilege tax" under the Digital Asset Privilege Tax Act amendment contained in the bill, established registration obligations for any organization functioning as a digital asset broker within Illinois. Brokers failing to comply with the requirements starting Jan. 1 could face charges of a Class 3 felony under state law and potentially receive a prison term ranging from two to five years along with financial penalties reaching up to $25,000.
Following its approval by the state general assembly this past Monday, the budget legislation requires Governor JB Pritzker's signature to take effect. Pritzker has issued multiple public declarations indicating his intention to sign the legislation in the near future, though he had not yet done so by Friday morning. State lawmakers project the cryptocurrency tax will produce $60 million in revenue for the state.
The cryptocurrency taxation provision has sparked criticism from industry representatives who accuse officials of "burying" the regulation inside a sprawling budget package. Both The Digital Chamber and Illinois Blockchain Association composed a letter on Wednesday calling on the state to reject the Digital Asset Privilege Tax Act, asserting that it would prove "economically destructive" and provided the sector with no advance warning of such intentions.
No other state has imposed a similar tax, and the lack of stakeholder engagement surrounding this proposal raises significant concerns
The Digital Chamber in a Thursday X post
Illinois governor goes after insider trading on prediction markets
The cryptocurrency taxation measure included in Illinois' budget comes after Pritzker signed an executive order prohibiting state employees from placing wagers on prediction market event contracts through platforms such as Kalshi and Polymarket. The EO, which received his signature on April 21, was issued amid worries that elected officials might exploit these platforms "for personal enrichment and advantage based on access to nonpublic information."