Illinois Governor JB Pritzker signed Senate Bill 3019 on Tuesday, enacting a 0.2% tax on crypto transactions. The decision drew immediate criticism from crypto advocates who pushed him to strike the provision.
The measure is projected to generate more than $800 million in additional tax revenue to help fund the state’s $55.9 billion fiscal 2027 budget.
A Crypto Tax Bundled Into the Budget
The legislation introduces several new tax initiatives, with major revenue sources expected to come from taxes on digital advertising, sports betting, cryptocurrency investors, and social media.
The Digital Asset Privilege Tax Act takes effect January 1, 2027. It charges 0.2% of the value of the digital asset involved in a transaction. Out-of-state brokers are subject to the rule once Illinois sales reach $100,000.
“Beginning January 1, 2027, a tax is imposed upon the privilege of receiving any digital asset business activity by a customer in this State at the rate of 0.2% of the value of the digital asset to which the digital asset business activity relates. It shall be the duty of the digital asset broker making or effectuating the sale of the digital asset business activity to collect the tax provided by this Section on each sale,” the bill reads.
The law also adds registration and reporting duties for brokers. Violations of the Illinois statute can be charged as a Class 3 felony.
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Crypto Firms Warn Illinois Tax Will Push Builders to Other States
The Crypto Council for Innovation (CCI) urged Pritzker to issue a line-item veto of Article 3. The group warned the tax could drive builders and investment out of Illinois.
“This punitive structure would have a profound chilling effect on digital asset activity in Illinois,” CCI said.
Chicago hosts crypto and trading firms, including Jump Crypto and Bitnomial. Industry groups fear the tax pushes such companies toward friendlier states.
CCI argued that no comparable state tax applies to stocks, bonds, or derivatives. It said the law singles out crypto based on its underlying technology.
a16z Head of Policy and General Counsel Miles Jennings echoed that criticism. He compared the levy to taxing email.
The backlash extends beyond crypto. NetChoice urged Pritzker to veto the social media and advertising taxes, citing federal preemption. Legal challenges now appear likely before the rules take effect in 2027.
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