As U.S. states continue to face federal funding cuts and higher expenses, they must now turn to novel revenue sources to make up the difference. While New York and Rhode Island have implemented Pied-a-Tierre taxes and North Carolina and Kentucky have imposed a tax on prediction markets, the state of Illinois has decided to put cryptocurrency in its crosshairs. Effective in 2027, Illinois will be the first state to levy a tax on the value of digital assets involved in a covered transaction. While Illinois expects to raise $60 million in incremental tax revenues from this new crypto tax, it may come with some unintended consequences.

What Exactly Is Illinois’s Crypto Tax?

As part…