Illinois Lawmakers Advance Budget Proposal with Cryptocurrency Tax
Illinois lawmakers have recently advanced a substantial budget proposal that includes a contentious new measure targeting cryptocurrency transactions. As part of the $56 billion fiscal plan for the year 2027, state legislators voted to introduce a 0.2% tax on all crypto transactions, placing the responsibility of collection squarely on registered digital asset brokers. This legislative action has sparked significant pushback from advocates in the digital asset sector, who argue that this tax could adversely affect crypto users in Illinois.
Details of the Legislation
The provision was incorporated into a lengthy 1624-page Senate bill, designated Senate Bill 3019, which was passed on a partisan basis by the Illinois General Assembly early this week. It outlined not only the tax but also established strict registration criteria for any organization acting as a digital asset broker in the state. Failure to comply with these requirements, which will take effect from January 1, could result in grievous legal consequences—a Class 3 felony, potentially leading to prison sentences ranging from two to five years, and fines reaching as high as $25,000.
Anticipated Approval and Revenue Expectations
While the bill is one legislative step away from becoming law, as it awaits the signature of Governor JB Pritzker, there is an expectation that he will approve it swiftly. Pritzker has indicated support for the budget, which legislators predict will generate around $60 million in revenue from the newly implemented crypto tax.
Industry Response and Concerns
This proposed tax has drawn fierce criticism from industry advocates, who claim it was stealthily embedded within the larger budget framework. Representatives from the Digital Chamber and the Illinois Blockchain Association expressed their concerns in a letter sent earlier this week, describing the legislation as “economically destructive” and criticizing the significant lack of prior consultation with stakeholders in the industry. They highlighted that no other state in the U.S. has adopted a similar tax measure and emphasized the need for greater engagement with the crypto community.
Governor’s Executive Order
The introduction of this crypto tax comes shortly after Governor Pritzker issued an executive order prohibiting state employees from engaging in betting activities related to prediction market event contracts, underscoring his administration’s cautious stance on cryptocurrency and related technologies. The order was enacted on April 21 to prevent potential conflicts of interest, ensuring that public officials do not exploit access to nonpublic information for personal gain.
