Illinois drafts rules for 0.2% cryptocurrency transaction tax

The Illinois Department of Revenue has released draft rules for the Digital Asset Tax Act (DATA), which imposes a 0.2% privilege tax on the gross value of cryptocurrency transactions. Unlike federal capital gains models, this tax applies to all digital asset activities, including conversions, transfers, and custodial storage, regardless of whether the transaction results in a profit or loss.

Enacted as part of the state’s fiscal 2027 budget, the law is expected to take effect on January 1, 2027. The measure is projected to contribute approximately $60 million to the state budget. To enforce the tax, crypto service providers operating in Illinois or earning over $100,000 annually from residents must register with the state; failure to comply is classified as a Class 3 felony.

The proposal has faced significant opposition. The Crypto Council for Innovation and the Blockchain Association have filed motions to block the act, arguing it is discriminatory and punitive. Critics and venture capitalists have also warned that the framework could create a double taxation system.