On September 28, 2026, the Illinois Department of Revenue (Department) issued draft rules on the state's new Digital Asset Tax (DAT).¹ The Department is seeking public review and feedback on the draft rules; comments are due by close of business on October 30, 2026.²

Beginning January 1, 2027, the DAT applies to the privilege of receiving from a digital asset broker, any digital asset business activity by a customer in Illinois (i.e., exchange, transfer, or storage of a digital asset as part of a business or on behalf of a customer who has contracted with the business for the provision of those services). The tax rate is 0.2% of the value of the digital asset to which the digital asset business activity relates. It is the responsibility of the digital asset broker with a physical presence in Illinois or at least $100,000 of in-state digital asset receipts to collect the DAT. (See Tax Alert 2026-1374).

The draft rules³ provide guidance regarding the implementation of the DAT, including:

• What is included and excluded from the definition of a digital asset
• When the exchange, transfer or storage of a digital asset constitutes "digital asset business activity" and what is considered "valuable consideration"
• What transactions the DAT is imposed on with examples
• When the sale of a digital asset business activity transaction is sourced to Illinois
• How to register as a digital asset broker and when a certification of registration could be revoked
• When a DAT return must be filed and the tax paid
• How to file a claim for a credit memoranda when the amount of DAT paid exceeds the digital asset broker's liabilities and how to assign or transfer a credit memoranda
• What books, records and other documentation the digital asset brokers are required to maintain to determine the location of a sale of digital asset business activity

The Department has created a DAT webpage, which currently includes links to the statutory provisions, draft rules and a placeholder for future additional information.

Implications

Interested parties should review the draft rules and consider submitting comments to the Department by the October 30 deadline. The Department is seeking specific input on (1) issues or questions not addressed in the draft rules, and (2) suggestions as to additional examples that would clarify how the DAT is imposed in specific situations.

Multiple lawsuits challenging the constitutionality of the DAT have been filed, as well as a motion for a preliminary injunction to halt the imposition of the tax.⁴ The plaintiffs in both suits argue that the DAT is facially invalid under the Illinois and US constitutions and is preempted by the federal Internet Tax Freedom Act, among other claims.