Illinois lawmakers pass 0.2% crypto transaction tax

TLDR

Illinois has approved a state budget that includes a 0.2% tax on crypto transactions handled by digital asset brokers, but it still needs the governors signature to become law.

1. The tax is structured as a privilege tax on digital asset brokers at 0.2% of covered crypto transactions, within the FY2027 budget bill.
2. Brokers must register with the state; unregistered activity after January 1 could be treated as a Class 3 felony with potential prison time and fines.
3. Industry groups say this first?of?its?kind state tax could drive crypto business out of Illinois, and are pressuring the governor to veto or amend it.

Deep Dive

1. What Lawmakers Actually Passed

Illinois lawmakers approved a $56 billion fiscal year 2027 budget that includes a 0.2% tax on cryptocurrency transactions, described as a privilege tax under the Digital Asset Privilege Tax Act (Senate Bill 3019) inside the budget package.

The tax is assessed on the digital asset broker making or effectuating the sale of the digital asset business activity, meaning the legal obligation sits with brokers, not directly with individual traders.

The budget has cleared the General Assembly along party lines but is not yet in force; Governor JB Pritzker has said he intends to sign it, so the measure is widely expected to become law soon.

2. How It Hits Users, Brokers, and Markets

Any registered digital asset broker operating in Illinois would have to calculate and remit 0.2% of the value of covered crypto transactions to the state. In practice, most brokers are likely to pass that cost through to users via higher fees or explicit surcharges.

The act also requires brokers to register with Illinois. Operating as a digital asset broker in the state without complying after January 1 can be prosecuted as a Class 3 felony, with potential penalties of two to five years in prison and up to 25,000 dollars in fines, according to budget summaries and industry reports.

3. Industry Backlash And What To Watch

Industry groups including The Digital Chamber and the Illinois Blockchain Association have publicly urged the governor to reject the measure, calling it economically destructive and noting that no other U.S. state currently imposes a similar transaction tax on crypto in their critiques.

They argue that embedding the tax in a 1,624 page budget bill, rather than debating it as standalone digital asset legislation, limited stakeholder input and may push exchanges, brokers, and startups to base operations in other states.

Next, watch three things: whether Pritzker signs as signaled, whether implementing rules clarify which platforms are digital asset brokers for Illinois purposes, and whether lawsuits or political pushback slow or block enforcement.

Confidence: high because multiple independent policy and news sources describe the same bill structure, rate, and status.

Conclusion

Illinois is on track to become the first U.S. state to layer a dedicated 0.2% transaction tax on crypto trades routed through in?state digital asset brokers, with criminal penalties for non?compliance.

If signed and enforced as written, it adds a new, permanent cost to trading from or through Illinois and could shift volume and business formation to friendlier jurisdictions, even as federal lawmakers separately work on broader crypto tax clarity.