Illinois' FY2027 budget includes a 0.2% tax on cryptocurrency transactions, a move that could funnel $60 million a year into state coffers. The tax has drawn immediate criticism from industry groups who say it will stifle a nascent sector and push crypto businesses to friendlier states.
How the tax works
The 0.2% levy applies to each crypto transaction — buying, selling, or transferring digital assets. It's a flat percentage, not a flat fee, meaning a $100 trade costs an extra 20 cents, while a $10,000 trade adds $20. The revenue estimate of $60 million assumes current trading volumes hold steady. The tax is part of a broader budget package that lawmakers passed this week.
Industry pushback
Crypto advocacy groups were quick to pan the plan. They argue the tax is poorly targeted and could hurt retail investors more than institutions. Some warn that Illinois risks becoming a testing ground for other cash-strapped states looking to squeeze revenue from crypto. The groups haven't said whether they'll sue, but they're mobilizing to lobby for a repeal or exemption for small trades.
The tax takes effect July 1, 2026, the start of the fiscal year. Exchanges and payment processors operating in Illinois will need to build compliance systems fast — or decide it's not worth the hassle. The state Department of Revenue will issue guidance on collection and reporting in the coming weeks. For now, the biggest unknown is whether the tax actually generates the projected $60 million or chases enough volume away that it comes up short.
