Illinois releases draft rules for 0.2% digital asset transaction tax, stablecoins included in taxation

Odaily News: The Illinois Department of Revenue has released draft rules for the already-legislated 0.2% digital asset transaction tax, clarifying that stablecoins will be considered taxable digital assets, while non-fungible tokens are not within the scope of taxation.

The draft stipulates that DeFi transactions are generally exempt; however, fees paid by users that are deemed "valuable consideration," such as protocol fees used to operate or maintain a platform, may trigger taxation. Network fees and swap fees paid solely to liquidity providers do not trigger the tax.

Cross-chain bridging conducted through digital asset brokers with consideration paid will be treated as a taxable exchange activity. When a centralized exchange transfers funds to a self-custodial wallet, if the exchange charges a fee, it may also be subject to taxation.

The tax law was approved in June and is scheduled to take effect on January 1, 2027. The Illinois Department of Revenue is soliciting public comments on the draft, with a deadline of October 30. (Cointelegraph)