Crypto industry aghast at Illinois' new tax on holding or transferring digital assets in state budget

Illinois enacted a 0.2% tax on digital asset transactions and holdings as part of its state budget, effective July 1, 2024. This new tax, added late in the legislative process, applies to businesses operating within the state that engage with cryptocurrencies and other digital assets. The tax is structured as a 0.2% assessment on the value of digital assets when they are held or transferred by a business. This measure has drawn significant criticism from the cryptocurrency industry, with many expressing concerns about its potential impact on innovation and business operations within Illinois. Industry representatives have stated that such a tax could drive businesses involved in digital assets to relocate to states with more favorable regulatory environments. The specific details of how the tax will be implemented and enforced are still being clarified, but the broad application to holding and transferring digital assets has caused widespread concern. Two individuals familiar with the budget negotiations indicated that the tax is unlikely to be removed from the final legislation.