Crypto Advocates Sue Illinois Over Planned Digital Asset Tax

The Crypto Council for Innovation (CCI) and Blockchain Association (BA) have filed a lawsuit against Illinois officials over the state's 0.2% tax on cryptocurrency, set to take effect in January 2027.

The advocacy groups argue that the tax violates the US Constitution, the state's constitution, federal and state due process laws, and the federal Internet Tax Freedom Act.

According to the lawsuit, the tax is 'unconstitutionally vague' as it places the burden on residents and brokers to determine what and how such assets are taxed under the threat of serious civil and criminal penalties.

The CCI and BA argue that Illinois cannot impose a novel tax regime that discriminates against digital commerce, creates uncertainty for consumers and businesses, and threatens to fragment a rapidly growing national market.