Illinois Enacts First Statewide Crypto Transaction Tax
- Illinois Governor JB Pritzker signed a $55.9 billion budget bill that includes a new token transaction tax of 0.2% on all digital asset transactions.
- The tax applies to any registered platform engaging in “digital asset business activity,” affecting both in-state and out-of-state companies with customer activity in Illinois.
- The legislation is expected to generate over $800 million in new tax revenue to support the state’s fiscal budget for the upcoming year.
- Industry groups, including the Crypto Council for Innovation, criticized the law, arguing it disproportionately burdens residents and stifles innovation.
- This makes Illinois the only state to impose such a tax on digital assets regardless of income or gains, unlike traditional financial instruments.
The implementation of this DeFi-related tax comes at a time when federal regulations are being considered, raising concerns about its impact on local innovation and competitiveness in the crypto space.
With this new law, Illinois sets a precedent by taxing digital asset transactions uniquely compared to other financial instruments, potentially reshaping how crypto is utilized within the state.(Source)
