According to a fiscal year 2027 budget bill passed by the Illinois General Assembly, the state is moving forward with a new tax on cryptocurrency transactions that would apply to digital asset brokers operating in Illinois. Summary Illinois lawmakers approved a budget bill containing a 0.2% tax on crypto transactions and new registration rules for digital asset brokers. Unregistered brokers could face Class 3 felony charges, carrying penalties of up to five years in prison and $25,000 in fines. Industry groups including the Digital Chamber and Illinois Blockchain Association have urged Governor JB Pritzker to reject the measure. Included within the state’s $56 billion budget package, the proposal introduces a 0.2% tax on crypto transactions under a provision known as the Digital Asset Privilege Tax Act. Lawmakers approved the measure along party lines on Monday, leaving only Governor JB Pritzker’s signature before it can become law. State budget documents estimate the tax could generate approximately $60 million in revenue. Under the proposal, any entity classified as a digital asset broker would be required to register with the state before facilitating covered crypto transactions. Failure to comply could carry criminal consequences. The legislation states that brokers operating without meeting registration requirements after Jan. 1 may face Class 3 felony charges, which in Illinois can result in prison sentences ranging from two to five years and fines of up to $25,000. Industry groups have opposed the proposal Opposition emerged shortly after the bill cleared the legislature. In a joint letter released on Wednesday, the Digital Chamber and the Illinois Blockchain Association urged state officials to reject the Digital Asset Privilege Tax Act, arguing that the proposal would harm the local digital asset industry. Illinois’ proposed 0.2% digital asset tax would negatively impact residents and businesses at a time when digital asset adoption and innovation are accelerating. No other state has imposed a similar tax, and the lack of stakeholder engagement surrounding this proposal raises… pic.twitter.com/Yrh2t7uj7C— The Digital Chamber (@DigitalChamber) June 4, 2026 The organizations said the measure was introduced without meaningful consultation with industry participants and noted that no other U.S. state currently imposes a comparable tax on crypto transactions. Separately, the Digital Chamber stated in a post on X that the proposal raised concerns because stakeholders received little advance notice before lawmakers incorporated it into the budget package. The group described the tax as economically damaging and called for its removal before final approval. Attention has also focused on the way the measure advanced through the legislature. Critics have argued that the crypto tax was embedded within a 1,624-page budget bill rather than being debated as standalone legislation. States and Congress are increasing scrutiny of digital assets The Illinois proposal arrives as policymakers across the United States examine new approaches to digital asset oversight and taxation. Earlier this year, Governor Pritzker signed Executive Order 2026-04 prohibiting Illinois state employees from using nonpublic information obtained through their official duties to trade prediction market contracts or assist others in doing so. According to the governor’s office, the order was intended to strengthen ethics safeguards as prediction markets continue to expand. A similar measure was adopted in New York one day later when Governor Kathy Hochul signed Executive Order 60, which bars state officials from using confidential government information for personal gain in prediction markets and authorizes disciplinary action for violations. Meanwhile, federal lawmakers are considering separate crypto tax proposals. On June 5, the U.S. House Ways and Means Committee released seven discussion drafts covering subjects including stablecoin payments, staking rewards, mining income, DeFi lending, wash-sale rules, charitable donations, and voluntary disclosure programs for crypto taxpayers. According to the committee, the proposals will be discussed during a June 9 congressional hearing and draw from ideas previously included in the PARITY Act and legislation introduced by Senator Cynthia Lummis. Governor Pritzker has publicly indicated that he intends to sign Illinois’ budget package, though the measure had not yet received final approval as of Friday morning.
