Key Points
- Article 3 of Illinois SB 3019, the Digital Asset Privilege Tax Act, would impose the most punitive digital asset tax in the country into law.
- This will create an unprecedented tax regime that disproportionately burdens Illinois residents for simply using digital assets and will drive innovation and builders out of the state.
- Illinois would become the only U.S. state to tax customers this way. No state imposes a comparable transaction tax on stocks, bonds, or derivatives.
- CCI urged Governor JB Pritzker to issue a line item veto of the provision before it takes effect.
Most people who use digital assets do simple things with them. They move funds between accounts, hold assets in custody, or trade on an exchange. A new tax proposal in Illinois would treat each of those everyday actions as a taxable event, and it would do so in a way no other state has tried.
What is the Illinois Digital Asset Privilege Tax Act?
The Digital Asset Privilege Tax Act was included in Article 3 of SB 3019, the state’s budget for fiscal year (FY) 2027. The Act imposes a 0.2% tax on the value of digital assets held or transacted by Illinois residents, capturing routine digital asset activity, including exchanging, transferring, or holding digital assets.
It carves out no meaningful exemptions, reaching even a transfer a person makes between their own accounts. On June 16, 2026, CCI urged Illinois Governor JB Pritzker to issue a line item veto of the provision before it takes effect and makes Illinois the only state in the country to tax customers this way.
How is the tax different from other taxes?
What sets the Digital Asset Privilege Tax Act apart is how it is built. Most taxes are tied to income, gains, or profits, so they apply when someone actually earns something.
This tax is tied to the technological nature of the financial asset, and in the case of digital asset transfers and storage, applies even when the taxpayer has not realized any gain.
An Illinois investor who exchanges, transfers, or holds a traditional financial instrument, such as a stock, bond, or derivative, pays no comparable state tax. The same instrument becomes taxable under the Digital Asset Privilege Tax simply because the asset is recorded on a blockchain. As the letter puts it, that is akin to taxing a letter because it arrives by email rather than by post.
Why does CCI oppose Article 3?
CCI’s letter to the Governor makes three points. First, the tax is at odds with sound tax policy. It singles out digital assets for uniquely punitive treatment based on the underlying technology rather than the substance of the transaction itself. CCI is calling for parity, not special treatment: like assets should be taxed alike, and a tax on digital asset activity with no equivalent for traditional assets picks winners and losers through the tax code.
Second, the process that produced the tax fell short. A first-of-its-kind measure targeting an entire industry and the residents who use its products warrants careful study and public input. Affected residents and businesses were not given the opportunity to weigh in before the proposal advanced.
Third, the timing is counterproductive. The tax arrives just as Illinois businesses prepare to implement the Digital Assets and Consumer Protection Act (DACPA), and just as Congress advances a national tax framework for digital asset activity.
What happens next?
The case CCI makes to Governor Pritzker is one of parity, not preference. There is no comparable state financial transaction tax on the exchange, transfer, or custody of stocks, bonds, or derivatives anywhere in the country, and singling out digital assets for that treatment sets a precedent other states could follow.
The timing compounds the problem. With DACPA implementation underway and Congress moving toward a national standard, acting now risks kick-starting a fifty state patchwork before a federal framework takes shape.
CCI is urging the Governor to veto Article 3, and will continue working with the administration and Illinois lawmakers to keep digital asset tax policy evidence-based, aligned with emerging federal standards, and fair to the consumers who would otherwise bear the cost.
Read the Crypto Council for Innovation’s Letter to the Illinois Governor
Below is the Crypto Council for Innovation’s comment letter to the Governor. You can also download our letter.
June 16, 2026
The Honorable J.B. Pritzker
Governor of Illinois
401 S. Spring St. Springfield, IL 62704
Governor Pritzker, The Crypto Council for Innovation (CCI) writes to respectfully urge you to issue a line item veto for Article 3 of SB 3019, the Digital Asset Privilege Tax Act. We are concerned this tax on digital asset activity could have severe consequences for Illinois’ digital asset industry and consumers.
CCI is a global alliance of industry leaders within the digital assets industry committed to promoting the advantages of responsible digital asset innovation while showcasing their potential for market transformation. CCI’s members represent various sectors within the digital asset ecosystem and share a common objective: advocating for responsible global regulation of digital assets to unlock economic opportunities, enhance quality of life, promote financial inclusivity, safeguard national security, and counter illicit activities. CCI firmly believes that achieving these objectives necessitates well-informed, evidence-driven policy choices achieved through collaborative participation with regulators and policymakers.
If enacted, the Digital Asset Privilege Tax Act would position Illinois as the only state in the country to punitively tax Illinois customers for simply receiving covered digital asset business activity. Unlike traditional tax frameworks that are tied to income, gains, or profits, this law would impose a 0.2% tax on everyday customer’s use of digital asset services such as exchange, transfer, or custody activities. The Act contains no meaningful exemptions for many common activities that digital asset users routinely undertake, such as transferring digital assets between one’s own accounts, making it even more likely that everyday consumers will bear the costs of this new tax.
Illinois would be creating a novel tax regime that uniquely and disproportionately burdens residents for simply using digital assets. We fear this proposal would seriously impair digital asset use and investment, as well as the state’s ability to attract new entrepreneurs and maintain its burgeoning startup community. This punitive structure would have a profound chilling effect on digital asset activity in Illinois. No other state in the country has adopted a similar transaction-based tax, meaning Illinois would be an outlier in an increasingly competitive landscape for digital asset innovation.
This proposal is at odds with sound tax policy. 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. Although such proposals have been made in Illinois, they have not become law. Article 3 thus singles out digital assets for uniquely punitive treatment based not on the substance of the underlying transaction, but solely on the technology used to process it. An investor who exchanges, transfers, or holds a stock, bond, or derivative in paper form incurs no such liability; yet a transaction of that very same instrument is taxed if it happens to occur on a blockchain. Taxing a transaction based on the medium through which it occurs is akin to taxing correspondence because it is delivered by email rather than by post. Rather than embracing innovation and the cost efficiencies that blockchain technology can deliver for ordinary Illinois investors and consumers, the state is poised to punish the very entrepreneurs and citizens seeking to put this technology to work.
It is important to note that CCI and its members are merely calling for parity, not special treatment. Like assets should be taxed alike. A tax on transferring digital assets with no equivalent for traditional assets picks winners and losers through the tax code.
We are also troubled by the process through which this proposal advanced. A first-of-its-kind tax targeting an entire industry and the Illinois residents who use its products and services calls for meaningful stakeholder engagement before enactment. Such a significant policy change warrants careful study, public input, and a thorough examination of its potential impact on consumers, businesses, and the state’s economy. Yet affected stakeholders were not afforded the opportunity to provide input on a proposal that could fundamentally reshape digital asset activity in Illinois and around the country.
The proposed tax is also particularly ill-timed, arriving just as digital asset businesses are preparing to navigate marketplace disruptions resulting from implementation of the Digital Assets and Consumer Protection Act (DACPA).
Moreover, Congress is now racing to advance a national tax framework for digital asset activity.* Illinois should focus on addressing challenges that may arise from DACPA’s implementation and defer consideration of its tax proposal until a national consensus has been reached. This will ensure alignment with federal standards and avoid inadvertently kick-starting a fifty state patchwork on digital asset tax policy.
We look forward to continuing to work with your administration to ensure Illinois can grow its emerging financial technology sector while furthering responsible oversight.
*See, e.g., Bipartisan ‘PARITY’ Act Introduced to Modernize Digital Asset Tax Rules, Thomson Reuters Checkpoint (May 28, 2026), https://tax.thomsonreuters.com/news/bipartisan-parity-act-introduced-to-modernize-digital-asset-tax-rules/; See also Full Committee Legislative Hearing on Digital Asset Taxation Before the H. Comm. on Ways & Means, 119th Cong. (June 9, 2026), https://waysandmeans.house.gov/event/full-committee-legislative-hearing-on-digital-asset-taxation/.
