Illinois Enacts the Strictest Digital-Asset Tax in the US as Industry Group Urges Veto

Illinois Governor JB Pritzker has signed SB 3019, the Digital Asset Privilege Tax Act, according to ChainCatcher via Bitget News, making the state the first in the country to impose a transaction-based tax on everyday digital-asset activity.

The Crypto Council for Innovation, a global industry alliance, has formally requested a line-item veto of Article 3, the section that establishes the levy. The group warns the law could "seriously impair digital asset use and investment" across the state.

The bill taxes digital-asset exchange, transfer, and custody at a rate of 0.2% per transaction, applying at each point of use rather than tying the tax to income or capital gains. As a16z crypto's Miles Jennings noted on X, "there is effectively no comparable state financial transaction tax imposed on the exchange, transfer, or custody of stocks, bonds, or derivatives anywhere in the country."

CCI adds that the law contains no meaningful exemptions for routine activities such as moving assets between one's own accounts, meaning Illinois consumers bear the levy even on self-transfers between wallets. The group's letter draws an explicit comparison: an investor who exchanges, transfers, or holds a stock, bond, or derivative incurs no equivalent state tax, regardless of whether the transaction settles on paper or through a brokerage platform.

“Uniquely Punitive”

CCI CEO Ji Hun Kim wrote to Pritzker urging a line-item veto of Article 3. The letter argues the regime singles out digital assets for "uniquely punitive treatment based not on the substance of the underlying transaction, but solely on the technology used to process it."

CCI also raised concerns about the legislative process: a first-of-its-kind tax affecting an entire industry and its consumers advanced without meaningful stakeholder engagement. The timing is particularly disruptive, arriving as Illinois businesses navigate the newly enacted Digital Assets and Consumer Protection Act and Congress advances a national digital-asset tax framework through the House Ways and Means Committee.

The broader stakes center on precedent. CCI warns that if the law stands, Illinois could inadvertently spark a fifty-state patchwork of conflicting digital-asset tax regimes that undercuts any coherent federal approach as Congress works through stablecoin and market-structure legislation. Illinois has made no public statement on whether it will consider the line-item veto request.