Illinois Imposes First-Ever US State Tax on Crypto Transactions

Illinois has become the first state to impose a tax on cryptocurrency transactions. Starting January 1, 2027, a 0.2% tax will be levied on digital asset exchanges, transfers, and custody services in the state.

The tax is part of a broader $56 billion state budget bill signed into law by Governor JB Pritzker on June 16. The provision, called the Digital Asset Tax Act, was added to the bill in the final stages of negotiations.

Industry groups have raised concerns about the scope and potential impact of the tax. The Illinois Digital Chamber warned that converting one digital asset into another could trigger a 0.2% charge on the full value involved, regardless of whether the customer realized a gain or loss.

The Crypto Council for Innovation, the Illinois Blockchain Association, and the Digital Chamber lobbied against the bill before it passed. While some have discussed filing lawsuits to challenge the tax, none have been filed as of yet.