Illinois Draft Rules Clarify Digital Asset Tax Treatment
Illinois is taking steps to clarify how its digital asset transaction tax will be applied. Draft rules recently published by the state's tax officials detail which transactions and assets will fall within the scope of the law. The 0.2% tax, approved in June, will take effect on January 1, 2027.
Under the proposed rules, stablecoins would be treated as digital assets subject to tax, while nonfungible tokens (NFTs) would be excluded. Decentralized finance (DeFi) transactions would generally be exempt unless users pay fees considered 'valuable consideration,' such as protocol fees for operating or maintaining a platform.
Crypto bridging conducted through a digital asset broker for consideration would also be taxable exchange activity, and transfers from centralized exchanges to self-custody wallets could be taxed when the exchange charges a fee. The Illinois Department of Revenue is accepting comments on the draft until October 30.