A16z Crypto counsel: Proposed Illinois crypto tax is a step backward

Miles Jennings, legal counsel for a16z Crypto, has criticized the proposed Digital Asset Privilege Tax Act in Illinois, which would impose a 0.2% tax on cryptocurrency transactions, calling it a regressive law for the blockchain industry. He noted that the law could lead to taxes on the simple act of buying BTC or holding it on an exchange. Jennings pointed out that virtually no U.S. state imposes a similar financial transaction tax on stocks, bonds, or derivatives. He argued that this approach specifically targets crypto and could potentially violate several federal laws. Furthermore, Jennings described the logic as irrational, stating that it is equivalent to taxing an asset just because it is recorded on a blockchain while its paper equivalent remains untaxed. "This is like imposing a tax on email," he said. He emphasized that instead of encouraging the innovation and efficiency of blockchain technology, the state of Illinois is burdening the industry and its users.