Illinois, ladies and gentlemen.
Gov. J.B. Pritzker has signed a state budget that taxes any business activity involving digital assets — including simply holding or transferring them.
Not joking.
From CoinDesk:
The law enacts a 0.2% tax on 'receiving any digital asset business activity,' according to the text of the bill, which defined digital asset business activity as 'any single occurrence of exchanging, transferring or storing a digital asset as part of a business or on behalf of a customer.'
Yes, you read that right. Not just trading. Not just realizing gains. Merely existing with crypto in the Land of Lincoln now comes with a tax.
The provision was apparently jammed into the $56-billion budget at the last possible second, because nothing says "transparent governance" like sneaking in a brand-new transaction tax on an emerging asset class right before everyone goes home for the year.
The legislature is now out of session, so good luck fixing it until the fall — assuming Pritzker feels like listening, which he almost certainly doesn't (maybe lure him in with a cheeseburger).
The tax hits firms "exchanging, transferring or storing" digital assets for Illinois residents. So if you're a business with over $100,000 in gross receipts serving people in the state, congratulations, you're now a tax collector for the privilege of letting citizens custody their own money outside the traditional banking system.
Let's just say crypto folks are not happy about this. Let's check in with the Crypto Council for Innovation:
'Unlike traditional tax frameworks that are tied to income, gains or profits, this law would impose a 0.2% tax on everyday customers' use of digital asset services such as exchange, transfer or custody activities,' CCI noted in its letter to the governor, arguing that the measure uses the tax code to pick winners and losers by singling out crypto for unique treatment. 'There is effectively no comparable state financial transaction tax imposed on the exchange, transfer or custody of stocks, bonds or derivatives anywhere in the country.'
The law is set to take effect on January 1, 2027, so expect a bunch of Friendly Illinois Peoples to invade your state if you're lucky enough to border The Prairie State.
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