Illinois Enacts 0.2% Digital Asset Tax for Covered Transactions

Illinois has introduced draft rules for a 0.2% tax on digital assets handled in covered transactions, which will take effect on January 1, 2027.

The Digital Asset Tax Act applies to the value of covered assets, not to the broker's fee. A $10,000 transaction in digital assets would produce a $20 tax, regardless of whether the customer made a profit or loss.

The draft treats stablecoins as digital assets subject to the tax, even when they are designed to maintain a fixed value against dollars, commodities, or other financial instruments.

NFTs, tokenized securities, and tokenized commodities appear among the proposed statutory exclusions. DeFi transactions are generally exempt because users do not provide valuable consideration to a digital asset broker, but protocol fees collected for operating or maintaining a DeFi service can be taxable.