Crypto Groups Challenge Illinois Digital Asset Tax Law

The Crypto Council for Innovation and Blockchain Association have filed a lawsuit against the State of Illinois to block enforcement of the Digital Asset Tax Act. This law, which is set to take effect in January 2027, would charge a 0.2% tax on the value of digital assets whenever they are exchanged, transferred, or held in custody.

The complaint names David Harris, director of the Illinois Department of Revenue, Attorney General Kwame Raoul, and Sangamon County State's Attorney John Milhiser as defendants. The lawsuit raises seven counts, including that the tax violates the federal Internet Tax Freedom Act and the Constitution's dormant Commerce Clause.

A Maryland court has already tested this argument, striking down a similar digital advertising tax on the same grounds just four days before the Illinois suit was filed. Industry groups have been fighting this law since before it existed, with CCI publicly urging Governor JB Pritzker to veto the bill and the Chamber of Digital Commerce filing the first lawsuit against the tax.