US State Illinois Enacts Groundbreaking 'Anti-Crypto' Legislation
Illinois Governor J.B. Pritzker has signed a controversial law introducing a 0.2% tax on cryptocurrency transactions, including wallet transfers and storage, sparking backlash from industry leaders who warn it could harm innovation and drive crypto businesses out of the state.
Illinois Governor J.B. Pritzker has signed Senate Bill 3019 into law, establishing what industry leaders and legal experts are calling the most aggressive and punitive piece of crypto legislation at the state level to date.
Central to this new law is Article 3, known as the "Digital Asset Privilege Tax Act," which introduces a novel 0.2% transaction tax on everyday cryptocurrency activities.
This pioneering tax framework is particularly contentious due to its broad scope and lack of exemptions. It applies not only to commercial transactions but also to standard non-commercial activities, meaning users will incur the tax even for simply moving funds between their own personal wallets.
Crypto attorney and legal expert, Miles Jennings further clarified that the law taxes the exchange, transfer, or storage of digital assets, impacting actions like buying Bitcoin or holding it on a platform like Coinbase.
The Crypto Council for Innovation (CCI) has warned about the severe harm this legislation could inflict on the local economy. The CCI stated that this unprecedented tax regime disproportionately burdens Illinois residents for merely using digital assets and is likely to drive innovation and businesses out of the state.
They explicitly highlighted the unfair targeting of everyday crypto users compared to participants in traditional finance, noting the absence of meaningful exemptions for common digital asset activities.
The novel tax regime has drawn comparisons to potentially taxing emails, underscoring its perceived absurdity and discriminatory nature. As one statement articulated, "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."
Miles Jennings echoed this sentiment, describing the legislation as a major threat to decentralized infrastructure and one of the most anti-crypto laws in the U.S.
Jennings has further opined that this tax actively discriminates against digital assets in a manner that likely contravenes broader federal laws.
He pointed out the absence of comparable state financial transaction taxes on traditional assets like stocks, bonds, or derivatives anywhere else in the country, suggesting that crypto is being unfairly singled out in violation of several federal statutes.