Illinois Enacts First State-Level Digital Asset Tax

Illinois has created the nation's first explicit tax on digital assets. Beginning in 2027, digital asset brokers will be required to register with the state of Illinois before they can conduct any business with customers in Illinois. Illinois will impose a 0.2% tax on the value of a digital asset if the broker maintains a place of business in Illinois, either by (1) having a direct or indirect physical presence in Illinois or (2) having gross receipts from any digital asset business activity of $100,000 or more within a 12-month period. Digital asset broker is defined to include any person who regularly provides services transferring digital assets on behalf of another person for compensation. The term digital asset does not include non-fungible tokens (NFTs) or tokens for gaming. Brokers must begin collecting the tax from customers once they cross the $100,000 threshold or maintain a physical presence within Illinois. For more information on the rules governing the taxation of digital assets, visit Tax Facts Online. Read More: Link to Q7721.