Illinois approves 0.2% tax on crypto transfers and custody

Illinois has approved a new tax that could raise trading costs and limit platform access for crypto users in the state. Under a budget signed by Gov. J.B. Pritzker, Illinois will begin charging a 0.2% tax on certain digital asset activity in January 2027.

The measure, included in Senate Bill 3019 as the Digital Asset Tax Act, requires digital asset brokers operating in Illinois to collect the fee on customer transactions. The law covers more than simple buy and sell orders. It also applies to transfers and custody of digital assets, giving crypto a tax treatment that traditional securities such as stocks, bonds, and derivatives do not face at the state level.

The state expects the tax to bring in about $60 million a year. Brokers must register with the Illinois Department of Revenue and show the tax as a separate line item on customer bills. The law can also reach firms outside Illinois if they generate at least $100,000 in yearly receipts from Illinois customers, with sourcing based on factors including physical presence, mailing address, account data, or IP address.

Industry groups say the broad wording could push firms to geoblock Illinois residents rather than risk compliance failures. The law includes felony penalties for brokers that do not follow the state's registration and remittance rules.