In the US state of Illinois, Governor JB Pritzker signed the 55.9 billion dollar state budget into law. The regulation also includes an article that imposes a 0.2% “privilege tax” on crypto asset transactions. The step in question took effect despite veto calls from organizations in the crypto industry.
Veto call from industry representatives
Ahead of the signing, the Crypto Council for Innovation called for a line-by-item veto of Senate Bill 3019. The organization stated that this article imposes a tax on all transactions carried out on registered platforms and within the scope of broadly defined digital asset activities. Crypto Council for Innovation is known as an industry association working on crypto policies and regulations.
The Crypto Council for Innovation argued that this regulation would not only place a disproportionate burden on Illinois residents simply because they use digital assets, but could also push innovative startups and developers out of the state.
According to the organization, the tax puts digital assets in a separate category solely due to their transaction technology. It was also stated that such a step was problematic in terms of timing, at a time when the industry was trying to comply with the Digital Assets and Consumer Protection Act regulation, which was handled at the federal level.
Impact that may cross state borders
US-based tax company BDO USA pointed out that the scope of the regulation may also affect companies outside Illinois. Accordingly, companies with sufficient customer activity in the state may also face the new tax regime.
The new system was adopted as part of the fiscal year 2027 budget. In this respect, Illinois became the first state to tax digital asset users in this way, regardless of income, earnings or profit status. Digital asset brokers operating in the state will also be required to register and meet new reporting obligations.
Common objection of opposing institutions
Digital Chamber also objected to the Digital Asset Privilege Tax Act by sending a similar letter on June 3. The organization stated that this tax would discourage the use of digital assets and could alienate Illinois residents from technological advancement at a time when financial services are increasingly turning to blockchain infrastructure.
There is no similar state-level financial transaction tax across the U.S. for stocks, bonds or derivatives, so crypto assets are kept separate, which could conflict with various federal laws, said Miles Jennings, head of policy and general counsel at a16z Crypto.
Target to close the budget deficit
The tax on crypto transactions was prepared as part of a broader budget package, along with registration and compliance obligations. It was stated that the package was designed to close the budget deficit and is expected to create over 800 million dollars in new tax revenue to support the 2027 fiscal year budget.
The regulation has sparked a new debate in the crypto industry, not only in terms of in-state users but also platforms and service providers. In particular, the scope of the tax, how it will be implemented compared to other financial instruments, and how legal objections will evolve are among the topics that will be closely monitored in the coming period.
