Illinois Governor JD Pritzker signed the Digital Asset Tax Act into law on Tuesday, imposing a 0.2% tax on digital asset transactions, including transfers and purchases, effective January 1, 2027. The tax applies to activity physically conducted in the state or by individuals with a primary place of use in Illinois. Digital asset brokers must collect the tax. The Crypto Council for Innovation (CCI) strongly criticized the law, calling it the 'most punitive digital asset tax' in the country and warning it would drive innovation and builders out of the state. The Illinois Policy Institute estimates the tax could generate $60 million in revenue next year. Critics also lament the lack of stakeholder input before passage. The law makes Illinois the only state to implement such a transaction-based tax on digital assets, potentially harming its competitiveness in the industry.

Key facts

• Illinois enacts 0.2% tax on digital asset transactions starting Jan 1, 2027.
• Tax applies to transfers and purchases in state or by state residents.
• Crypto Council for Innovation calls it 'most punitive digital asset tax'.
• Estimated state revenue of $60 million in first year.
• Critics say lack of stakeholder input and may drive away innovation.

KeyAudit data perspective