Illinois enacted a 0.2% excise tax on digital asset business activities through Senate Bill 3019, the Digital Asset Tax Act, filed on 31 May 2026. The tax takes effect on 1 January 2027 and applies to entities that facilitate the exchange, transfer, or management of digital assets in or from Illinois. This is the first state-level excise tax specifically targeting digital asset business activities to be enacted in the United States.
The tax is calculated at 0.2% of gross receipts derived from digital asset transactions or services conducted in the state. The Digital Asset Tax Act defines digital asset to include cryptocurrencies, tokenised securities, stablecoins, and similar instruments. Firms registered with the Illinois Department of Financial and Professional Regulation as digital asset businesses under the Digital Assets and Consumer Protection Act are the primary registrants subject to collection and remittance obligations. The Illinois Department of Revenue administers the tax.
Exchanges, custodians, stablecoin issuers, and digital asset transfer agents with business activities in Illinois must assess their gross receipt exposure and build compliance infrastructure before 1 January 2027. Firms operating remotely without a physical Illinois presence should determine whether user concentration or transaction volume in the state creates nexus under the Digital Asset Tax Act. Operators in multi-leg transaction chains should assess whether the tax applies at each transfer step or only at the point of final customer-facing service.
A repeal bill, HB 5798, is pending in the Illinois General Assembly and would eliminate the tax before its effective date if passed. The legislative prospects for HB 5798 are uncertain, and operators should treat the January 2027 effective date as operative for compliance planning absent an enacted repeal. The interaction between the Digital Asset Tax Act and Illinois's existing franchise and sales tax obligations is subject to clarification by the Department of Revenue.
Licentium advises digital asset firms on US state-level regulatory and tax compliance, including business activity nexus analysis and multi-state structuring. We may assist on this matter or refer within our partner network. Work we undertake includes state virtual currency licensing, digital asset tax nexus assessment, custodian and exchange regulatory analysis, and multi-jurisdictional digital asset compliance programmes.
Source: Illinois General Assembly, Senate Bill 3019 (Digital Asset Tax Act), filed 31 May 2026