Illinois Imposes 0.2% Crypto Transaction Tax, Sparking Controversy

The Illinois Department of Revenue has released a draft outlining details of its Digital Asset Tax Act (DATA), which will charge a 0.2% transactional 'privilege tax' on all crypto activities within the state, including conversions and custodial storage.

The law, signed by Governor J.B. Pritzker in June as part of the state's fiscal 2027 budget bill, requires mandatory state registration for crypto service providers operating within Illinois or earning over $100,000 annually from its residents. Failure to comply will be a Class 3 felony.

Supporters argue that the tax is necessary and will contribute an estimated $60 million to the budget. However, critics say it goes against Trump's directive to make America the world's crypto capital and could drive crypto service providers out of state due to double taxation and misunderstanding of blockchain technology.

Crypto giants led by the Crypto Council for Innovation (CCI) and the Blockchain Association have filed a motion to block the tax, calling it 'discriminatory' and 'the most punitive' of its kind in the US. Venture capitalist a16z warns that DATA creates a double taxation system, while Strategy's Michael Saylor warns it could dry up the state's liquidity.