On September 28, 2026, the Illinois Department of Revenue (DOR) published draft rules for implementing the Digital Asset Tax Act. The legislation introduces a tax on digital asset business activities that digital asset brokers provide to customers in Illinois. Before beginning the formal rulemaking process, IDOR is inviting industry stakeholders and other interested parties to review the draft rules and submit comments.
Key Issues with New Tax
Illinois Digital Asset Tax Act introduces a 0.2% tax on the value of digital assets involved in transactions, including exchanges, transfers, and storage services provided by digital asset brokers to Illinois customers. Originally scheduled to take effect on January 1, 2027, the tax requires brokers with a sufficient connection to Illinois to register and collect the tax on covered transactions.
According to DOR Director David Harris, this consultation aims to clarify the requirements of the new tax, taking into account the novelty of the legislation and the complexity of the digital asset industry. The DOR is particularly seeking comments on issues not covered by the proposed rules and additional examples that could clarify how the legislation applies in specific situations.
Notably, the Sangamon County Circuit Court has delayed the effective date of the Illinois Digital Asset Tax until July 1, 2027, following a joint motion filed on October 1, 2026, by the State of Illinois, the Chamber of Digital Commerce, and the Illinois Blockchain Association. The delay follows two legal challenges filed in July and August 2026 by industry groups, including the Blockchain Association and Crypto Council for Innovation, seeking to prevent enforcement of the tax through declaratory relief and preliminary and permanent injunctions.
Conclusion
The delay offers a reprieve, not a resolution. With litigation unresolved and the rules still in draft form, brokers should plan for multiple outcomes rather than assume the tax will be blocked or changed. Proactive engagement with policymakers and legal counsel will be essential to navigate compliance requirements and safeguard business interests during this transitional period.
