Selig Blasts Illinois Over 'Punitive' Crypto Tax Before 2027 Start

The Illinois Digital Asset Tax Act requires brokers to register with the Illinois Department of Revenue before conducting covered activity. Brokers must collect the tax as a separate line item on each transaction and file monthly reports. The law can reach firms outside the state if they serve Illinois users. Tax advisers have said customer records, mailing addresses, IP addresses, and other data may help determine whether activity falls under Illinois rules.

The criticism follows pushback from industry figures. Strategy co-founder Michael Saylor called the tax a "Big Mistake" after Governor JB Pritzker signed the budget, crypto.news reported at the time. Industry groups also warned the law could raise costs for users and push crypto firms away from the state.

Critics have focused on the tax's design. It applies to activity itself, not only to profits or capital gains. Some raised concerns about routine wallet transfers, broker reporting systems, and whether the rule treats digital assets differently from stocks, bonds, or derivatives.

The Illinois dispute comes while Congress reviews broader crypto tax rules. Lawmakers have split the Digital Asset PARITY Act into seven tax discussion drafts covering stablecoin payments, mining, staking, lending, wash-sale rules, charitable donations, and disclosure duties.

Federal agencies are also reviewing crypto market rules. The SEC and CFTC opened a joint rules review covering derivatives, margining, and market structure questions.

Selig's criticism frames the Illinois tax as a state-level move that may clash with federal efforts to build clearer digital asset rules. The law takes effect in 2027, leaving room for federal preemption or state-level changes before then. Brokers serving Illinois users have roughly 18 months to decide how to comply.