Blog · 16 October 2026

Illinois Digital Asset Tax Act (SB 3019): 0.2% Crypto Transaction Tax, July 2027 Delay and IDOR Draft Rules for US CPA Firms

By Keshav Bansal, CA

The Illinois digital asset tax—also called the Illinois crypto tax under the Digital Asset Tax Act in Senate Bill 3019—is a state transaction tax on the value of a digital asset involved in taxable “digital asset business activity,” not a federal income tax on gain. Drew Hemmings and Matt Musano of SALT Savvy (October 13, 2026) explain that the Illinois Department of Revenue released draft implementing rules on September 28, 2026, while an agreed preliminary injunction in Sangamon County has pushed the start date from January 1, 2027 to July 1, 2027. For US CPA firms, the lesson is simple: clients can owe Illinois tax on volume even when Form 8949 shows a federal capital loss.

What the Digital Asset Tax Act taxes

As compiled at 35 ILCS 195 (P.A. 104-468, effective June 16, 2026), the Act imposes a tax “upon the privilege of receiving any digital asset business activity by a customer in this State at the rate of 0.2% of the value of the digital asset to which the digital asset business activity relates.” Digital asset business activity means any single occurrence of exchanging, transferring, or storing a digital asset as part of a business or on behalf of a customer under an agreement for those services. The broker that makes or effectuates the sale must collect the tax.

Jones Day’s June 2026 commentary notes that Governor J.B. Pritzker signed the Revenue Omnibus Bill (S.B. 3019) creating this first-in-the-nation structure. Collection generally falls on a digital asset broker that maintains a place of business in Illinois—either through physical presence or through remote gross receipts from digital asset business activity of $100,000 or more in a 12-month period. Under Sec. 3-30, it is unlawful to engage in business as a digital asset broker in Illinois on or after January 1, 2027 without a Department certificate of registration; Jones Day stresses that registration attaches as soon as a broker serves an Illinois customer, while the $100,000 figure governs when collection begins. Sec. 3-55 makes certain violations a Class 3 felony.

Effective date delayed to July 1, 2027

The statute still says the tax begins January 1, 2027. Deloitte Tax LLP (October 8, 2026) reports that the Act is under challenge in the Circuit Court of Sangamon County under the Illinois and U.S. Constitutions and the federal Internet Tax Freedom Act. On October 1, 2026 the parties jointly asked for a stipulated preliminary injunction postponing the effective date to July 1, 2027; on October 7, 2026 the court signed that order. SALT Savvy attributes the suits to the Chamber of Digital Commerce and the Illinois Blockchain Association and notes that July 1, 2027 also aligns with the statutory transition end for registration under Illinois’ Digital Assets and Consumer Protection Act (DACPA).

CPA firms should calendar both dates: the statutory text, the court delay, and the possibility of further litigation or rule changes before go-live.

IDOR draft rules (Sept. 28): scope, brokers, wallets

IDOR’s September 28, 2026 news release says draft proposed rules for the Digital Asset Tax Act are posted for comment through October 30, 2026 and have not been filed with the Secretary of State or submitted to JCAR. The draft Part 497 text (and SALT Savvy’s summary) provide several working definitions CPA teams will see in client questions:

• Included assets: blockchain-based digital assets, including traditional cryptocurrencies, stablecoins, memecoins, and blockchain-based central bank digital currencies.
• Excluded assets: tokenized securities and tokenized commodities (with open questions about how commodity-pegged stablecoins will be distinguished).
• Brokers: centralized exchanges; DeFi exchanges that collect protocol or other fees for the exchange itself; and custodians, broker-dealers, digital payment processors, and other entities that manage and directly keep custody of customers’ digital assets.
• Common custodial wallets: transfers that only update balances inside a common custodial wallet without a blockchain entry are not taxable under the draft examples.
• Sourcing: “place of primary use” is the street address where the customer’s digital asset business activity primarily occurs; documentation required by federal agencies, such as a customer’s Form W-9, may establish Illinois location.
• Valuation: value is measured in U.S. dollars when the digital asset business activity is completed; the broker’s own exchange spot price may establish value, with a regulated market-data benchmark when the broker cannot provide one.
• Records: the draft imposes detailed recordkeeping, including account information sufficient to demonstrate movement of digital assets, “including private keys”—a point SALT Savvy flags as especially sensitive.

Deloitte notes the draft rules were issued before the injunction and still reference the original January 1, 2027 effective date. Treat them as proposed guidance, not final regulations.

Transaction tax vs federal income tax on crypto

IRS Notice 2014-21 treats convertible virtual currency as property for federal tax purposes. Selling, exchanging, or otherwise disposing of it generally produces gain or loss measured against basis; holding-period rules decide short-term versus long-term capital treatment when the asset is a capital asset. Moving an asset between wallets you control is not, by itself, the federal “sale or exchange” that Notice 2014-21 describes for gain recognition.

Illinois’s tax is different. It is levied on the value of the digital asset involved in a taxable brokered exchange, transfer, or storage event, at 0.2%, regardless of whether the customer has federal gain or loss. At that statutory rate, $10,000 of taxable digital-asset value produces $20 of Illinois tax even if the same disposition is a federal loss. That is closer in spirit to a securities transfer tax than to Schedule D. Pair that distinction with federal crypto reporting topics your firm already tracks—our guides on the wash sale rule and pending H.R. 10357 and crypto staking rewards and Form 1099-DA—and with Illinois remote-seller sales/use tax work in our DC and Illinois Wayfair guide.

Practical checklist for CPA firms

• Identify Illinois customers and brokers: ask which platforms exchange, transfer, or custody crypto for Illinois residents; note the $100,000 remote-receipts test and the separate registration trigger.
• Separate federal and state workpapers: Form 8949 / capital-gain schedules do not by themselves prove Illinois digital-asset tax; volume, broker identity, and sourcing documentation matter.
• Watch the draft comment window and injunction: comments on the draft rules run through October 30, 2026; the court-delayed July 1, 2027 start can still move.
• Flag custody and DeFi fee models: draft rules pull in fee-taking DeFi and custodians; free peer-to-peer principal trades without intermediaries are treated differently.
• Recordkeeping sensitivity: discuss with counsel how proposed “including private keys” language would interact with security policies if finalized.

Where Tax Brew fits

Tax Brew supports US CPA firms with crypto transaction workpapers, multi-state bookkeeping cleanup, and Form 8949-ready schedules so reviewers can separate federal property treatment from state transaction taxes. Your firm keeps the advice and the signature. The first 20 hours are free for qualifying engagements. See our services, or email info@taxbrewglobal.com.

Sources: SALT Savvy (Drew Hemmings & Matt Musano, Oct. 13, 2026), Illinois’ First-of-Its-Kind Crypto Tax Delayed Until July 2027; Illinois Department of Revenue, Digital Asset Tax Draft Proposed Rules Posted (Sept. 28, 2026) and draft proposed rules PDF (Part 497); 35 ILCS 195 (Digital Asset Tax Act), P.A. 104-468; Deloitte Tax LLP (Oct. 8, 2026), Illinois Department of Revenue proposes rules on the Digital Asset Tax; Jones Day (June 2026), Illinois Passes Nation’s First Digital Asset Tax; IRS Notice 2014-21. Draft rules are not final; litigation may change timing. General information, not tax or legal advice.