Illinois Crypto Tax Delay Requested Amid Industry Concerns
Illinois officials and crypto industry groups have jointly requested a court to delay a transaction tax that could charge investors even when their holdings have lost value. The proposed six-month pause would allow the legal challenge to proceed before collection begins.
The Digital Asset Tax Act sets a 0.2% levy on the value of assets involved in covered activity, which brokers would collect from customers. This means that even if an investment loses value, the transaction tax would still be applied.
A hypothetical example illustrates this: someone with a $12,000 investment that falls to $10,000 would still face a $20 tax bill when using a qualifying broker service involving that holding.
The Department of Revenue's draft rules tie the levy to an Illinois customer paying a qualifying broker for covered activity recorded on a blockchain. However, a network gas fee alone would not satisfy the draft's definition of payment to a broker.