Crypto Groups Sue Illinois Over Proposed 0.2% Digital Asset Tax

Two U.S. crypto trade groups have filed a lawsuit against Illinois officials to block a 0.2% digital asset tax from taking effect on January 1, 2027.

The Blockchain Association and Crypto Council for Innovation claim the tax violates federal and state constitutions, as well as the Internet Tax Freedom Act.

They argue that brokers could face registration, collection, reporting, and recordkeeping duties backed by civil and criminal penalties.

The groups also contend that Illinois' location test for transactions allows other states to tax the same transaction, potentially creating competing claims and fragmenting the national market.