Some digital asset industry advocates are pushing back against a provision in a $56 billion state budget passed by the Illinois General Assembly on Monday, due to its impact on crypto users.
In a Senate bill included as part of the Illinois state budget for the fiscal year 2027, lawmakers proposed a 0.2% tax on crypto transactions, to be imposed by the “digital asset broker making or effectuating the sale of the digital asset business activity.” The 1624-page bill, part of the revenue and tax package to fund the state’s 2027 budget, passed along party lines early on Monday.
Senate Bill 3019. Source: Illinois General Assembly
The measure, described as a “privilege tax” within the Digital Asset Privilege Tax Act amendment to the bill, included registration requirements for any entity operating as a digital asset broker in Illinois. Brokers who failed to follow the guidelines from Jan. 1 could be found guilty of a Class 3 felony in the state and subject to a prison sentence of two to five years and fines up to $25,000.
Passed by the state general assembly on Monday, the budget bill still needs Governor JB Pritzker’s signature before becoming law. Pritzker made several public statements signaling that he plans to sign the bill soon, but had not done so as of Friday morning. Lawmakers expect the crypto tax to generate $60 million for the state.
This crypto tax measure has prompted accusations from industry advocates of “burying” the rule within a massive budget proposal. The Digital Chamber and Illinois Blockchain Association penned a letter on Wednesday urging the state to reject the Digital Asset Privilege Tax Act, claiming that it would be “economically destructive” and gave the industry no notice of its intentions.
“No other state has imposed a similar tax, and the lack of stakeholder engagement surrounding this proposal raises significant concerns,” said The Digital Chamber in a Thursday X post.
Source: The Digital Chamber
Illinois governor goes after insider trading on prediction markets
The crypto tax proposal in Illinois’ budget followed Pritzker’s signing of an executive order banning state employees from betting on prediction market event contracts with companies such as Kalshi and Polymarket. The EO, signed on April 21, came in response to concerns elected officials could use the platforms “for personal enrichment and advantage based on access to nonpublic information.”