According to the 2027 fiscal year budget bill passed by the Illinois General Assembly, the state is moving forward with a new cryptocurrency transactions tax that will apply to digital asset traders operating in Illinois.
Summary
- Illinois lawmakers approved a budget bill containing a 0.2% tax on crypto transactions and new registration rules for digital asset dealers.
- Unregistered dealers may face Class 3 felony charges, carrying penalties of up to five years in prison and a $25,000 fine.
- Industry groups including the Digital Chamber and the Illinois Blockchain Association urged Governor JB Pritzker to reject the measure.
Included in the government’s $56 billion budget package, the proposal introduces a 0.2% tax on crypto transactions under a provision known as the Digital Property Tax Act. Lawmakers approved the measure along party lines Monday, leaving only Governor JB Pritzker’s signature before it becomes law.
State budget documents estimate the tax could bring in about $60 million. Under the proposal, any entity considered a digital asset dealer would be required to register with the government before handling covered crypto sales.
Failure to comply can carry criminal consequences. The law states that vendors who operate without meeting the registration requirements after Jan. 1 can face Class 3 felony charges, which in Illinois can result in prison terms of two to five years and fines of up to $25,000.
Industry groups opposed the proposal
The opposition came shortly after the bill cleared the Legislature. In a joint letter released Wednesday, the Digital Chamber and the Illinois Blockchain Association urged state officials to reject the Digital Assets Tax Act, saying the proposal would hurt the local digital assets industry.
The organizations said the measure was introduced without meaningful consultation with industry participants and noted that no other US state currently imposes a comparable tax on crypto trading.
Separately, the Digital Chamber said in a post on X that the proposal raised concerns because stakeholders received little advance notice before lawmakers included it in the budget package. The party described the tax as damaging to the economy and called for it to be removed before final approval.
Attention also focused on how the measure progressed through the legislature. Critics have argued that the crypto tax was included within the 1,624-page budget bill rather than discussed as a stand-alone piece of legislation.
States and Congress are increasing scrutiny of digital assets
The Illinois proposal comes as policymakers across the United States are exploring new ways to oversee digital assets and tax them.
Earlier this year, Governor Pritzker signed Executive Order 2026-04 that prohibits Illinois state employees from using non-public information obtained through their official duties to trade in speculative market contracts or assist others in doing so. According to the governor’s office, the order was intended to strengthen ethics as the prediction markets continue to grow.
A similar measure was adopted in New York one day later when Governor Kathy Hochul signed Executive Order 60, which prohibits state officials from using confidential government information for personal gain in the prediction markets and authorizes disciplinary actions for violations.
Meanwhile, federal lawmakers are considering different proposals for a crypto tax. On June 5, the US House Ways and Means Committee released seven draft hearings covering topics including stablecoin payments, staking rewards, mining earnings, DeFi lending, money laundering laws, charitable donations, and voluntary disclosure programs for crypto taxpayers.
According to the committee, the proposals will be discussed during the hearing of the conference on June 9 and taken from the ideas previously included in the PARITY Act and the legislation introduced by Senator Cynthia Lummis.
Governor Pritzker has publicly indicated that he intends to sign the Illinois budget package, although the measure had not received final approval as of Friday morning.
