Illinois introduces a tax on crypto transactions: a new blow to digital assets in the US
Illinois Governor JB Pritzker has officially signed a $55.9 billion state budget that includes an unprecedented tax on digital asset transactions. Starting January 1, 2027, brokers will be required to collect a 0.2% tax on the exchange, transfer, storage, and other cryptocurrency transactions for clients registered in the state.
This decision has drawn sharp criticism from leading industry organizations, including the Crypto Council for Innovation, the Digital Chamber, and the head of legal at a16z Crypto. The main objection is that the new tax singles out cryptocurrencies as a separate category, creating a discriminatory regime that does not apply to transactions involving stocks, bonds, or derivatives. Essentially, it is a direct blow to the principle of technological neutrality, which should underpin regulation.
Analysts at BDO USA warn that the tax could affect not only local companies but also firms outside Illinois if their annual revenue from state clients exceeds $100,000. This creates an extraterritorial effect that will complicate business operations for many crypto companies. State authorities, in turn, project that the entire package of tax measures will generate over $800 million in additional revenue in fiscal year 2027.
In my view, this move is a warning sign for the entire U.S. crypto industry. Illinois could set a precedent for other states seeking new sources of revenue. However, instead of fostering innovation, such an approach will only drive businesses to relocate to more favorable jurisdictions, as has already happened with mining companies after the introduction of taxes in New York.