Illinois approves 0.2% crypto tax amid industry backlash

Illinois approved a 0.2% crypto transaction tax, drawing industry criticism over potential burdens, innovation loss, and compliance challenges.

Illinois has passed a $55.9 billion state budget that introduces a 0.2% tax on cryptocurrency transactions, signaling a major regulatory change for digital assets. This tax, set to take effect in 2027, will apply to digital asset transactions handled by brokers, including exchanges, transfers, custody, and wallet services. Industry groups such as the Crypto Council for Innovation and legal experts from a16z Crypto have voiced strong opposition. They argue the tax places an undue burden on Illinois residents and risks driving away startups and developers. Critics also note that no other U.S. state imposes a similar tax on financial instruments like stocks or bonds. There are concerns the law could complicate compliance with federal regulations and impact companies outside Illinois that serve state residents. Despite these objections, the law was enacted, with state officials projecting about $60 million in annual revenue from the tax.