Crypto Groups Sue Illinois Over Digital Asset Tax

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

The CCI and BA 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. They claim that the tax is 'unconstitutionally vague' and places an undue burden on residents and brokers to determine what assets are taxed.

The advocacy groups also argue that the tax creates the specter of duplicative taxation and discriminates against digital commerce. This could potentially fragment a rapidly growing national market, according to Summer Mersinger, CEO of the Blockchain Association.