Illinois Publishes Draft Rules for Digital Asset Transaction Tax

Illinois has published draft rules detailing how its digital asset transaction tax will apply to various crypto activities. The state's 0.2% tax, set to take effect on January 1, 2027, will treat stablecoins as taxable digital assets.

The new rules exempt non-fungible tokens (NFTs) from the tax, but DeFi transactions are only exempt if users pay fees considered 'valuable consideration.' Network and swap fees paid solely to liquidity providers do not trigger the tax.

Crypto bridging is taxable when conducted through a digital asset broker for consideration, and transfers from centralized exchanges to self-custody wallets can also be taxed if the exchange charges a fee. Illinois approved the Digital Asset Tax Act in June despite opposition from crypto industry groups.

The state's Department of Revenue is accepting comments on the draft rules through October 30.