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Illinois 0.2% Crypto Broker Tax Draws Industry Fire, Legal Challenge
Illinois' 0.2% privilege tax on crypto brokers, tucked into a $55.9B budget bill, faces industry opposition and potential constitutional challenges over singling out digital assets.
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Illinois just did something no other state has done. It created a tax that treats digital assets differently from every other financial instrument.
Governor JB Pritzker signed SB 3019 into law in early June. Buried inside the state's $55.9 billion budget is the Digital Asset Tax Act, or DATA. It imposes a 0.2% privilege tax on brokers who exchange, transfer, or store digital assets for customers in the state. The tax takes effect January 1, 2027, and is projected to generate roughly $60 million in revenue.
This isn't a capital gains tax or a sales tax applied to crypto. It's a privilege tax on the business activity of handling digital assets, and it targets brokers specifically. To fall under the law's scope, a broker needs either a physical presence in Illinois or an economic nexus with the state, defined as generating over $100K in gross receipts from Illinois customers.
The 0.2% rate applies to the underlying transaction activity, not profits. No other state has carved out digital assets for this kind of standalone tax treatment. Traditional brokerages handling stocks, bonds, or commodities in Illinois don't face an equivalent levy.
Renato Mariotti, a former federal prosecutor, has been among the most vocal critics. His core complaint centers on how the tax was introduced: quietly folded into the state budget without meaningful public debate or standalone legislative consideration.