Michael Saylor Slams Illinois Crypto Tax as Industry Pushback Grows

Strategy co-founder Michael Saylor has strongly criticized Illinois’ newly approved crypto tax law, joining a growing list of industry leaders concerned about its impact on digital asset adoption and innovation. The legislation, known as the Digital Asset Privilege Tax Act (DATA), was recently signed into law by Illinois Governor J.B. Pritzker and is scheduled to take effect on January 1, 2027.

In a post on X, Saylor called the Illinois crypto tax a “Big Mistake,” highlighting concerns shared across the cryptocurrency sector. The new law introduces a 0.2% tax on cryptocurrency transactions, including transfers between digital wallets. State officials estimate the measure could generate approximately $60 million in annual revenue.

The legislation also affects crypto-based prediction markets. Platforms such as Polymarket may face a 1.75% tax on sports-related wagers, adding another layer of regulatory pressure on the emerging sector.

Illinois has already faced opposition from the crypto industry over its approach to digital assets and prediction markets. The state previously issued cease-and-desist orders to platforms including Polymarket and Kalshi, while the Commodity Futures Trading Commission (CFTC) continues to defend its authority over prediction markets through ongoing legal action.

The timing of the Illinois crypto tax is notable, as U.S. lawmakers are actively working on a federal framework for cryptocurrency taxation. The House Ways and Means Committee recently released several discussion drafts focused on digital asset tax policies, signaling broader efforts to establish clearer national regulations.

Meanwhile, the Crypto Council for Innovation (CCI) urged Governor Pritzker to veto the bill before it became law. In a letter to the governor, the organization warned that the tax could create significant challenges for Illinois’ crypto ecosystem. According to CCI, the measure differs from traditional tax systems that typically target profits, gains, or income rather than routine transactions.

The group also pointed out that the law lacks exemptions for small everyday crypto payments and does not include a de minimis provision to exclude minor transactions. CCI argued that the policy could discourage blockchain innovation, burden Illinois residents who use digital assets, and drive crypto businesses and developers to other states.

Adding to the debate, crypto attorney Joe Carlasare raised concerns about how the law will be applied in practice. He questioned whether moving Bitcoin from a self-custody wallet to Coinbase and then immediately selling it would count as one taxable event or two, highlighting potential uncertainty surrounding the legislation’s implementation.

As discussions around crypto taxation continue at both state and federal levels, Illinois’ new tax law is expected to remain a major point of contention within the digital asset industry.