Key facts
- Illinois released draft rules for its 0.2% digital asset transaction tax.
- Stablecoins will be treated as taxable digital assets; NFTs will be excluded.
- DeFi transactions are generally exempt unless fees are paid for platform operation.
- Crypto bridging is taxable if conducted via a broker for consideration.
- Transfers from exchanges to self-custody wallets may be taxed if the exchange charges a fee.
- The tax takes effect January 1, 2027, with comments due October 30.
Illinois tax officials have released draft rules detailing how the state's 0.2% digital asset transaction tax will be applied to various cryptocurrency activities. The proposed regulations aim to clarify the scope of the tax, which was enacted in June and is set to take effect on January 1, 2027.
Under the draft rules, stablecoins will be subject to the tax, while nonfungible tokens (NFTs) will be excluded. Decentralized finance (DeFi) transactions are generally expected to be exempt, provided that users do not pay fees considered "valuable consideration" for the operation or maintenance of a platform. Network fees and swap fees paid exclusively to liquidity providers will not trigger the tax.