Crypto Industry Challenges Illinois' Digital Asset Tax in Second Lawsuit
The Illinois digital asset tax has sparked controversy in the crypto industry, leading to a second lawsuit filed by the Crypto Council for Innovation (CCI) and the Blockchain Association. The groups argue that the 0.2% tax on digital asset transactions is discriminatory and violates both the U.S. Constitution and the Internet Tax Freedom Act.
The tax applies to companies with gross revenue of at least $100,000 based in Illinois or serving customers in the state. CCI CEO Ji Kim stated that the tax 'imposes a uniquely punitive burden on digital assets,' singling them out for taxation while exempting traditional financial transactions.
The lawsuit follows a similar challenge filed last month by the Digital Chamber, a trade association representing blockchain businesses. The outcome of this case may set a precedent for how states regulate and tax digital assets, influencing other jurisdictions to adopt similar measures or exercise caution.