Illinois' 0.2% Crypto Tax Sparks Heated Courtroom Battle
The state of Illinois is facing a full-blown courtroom war over its new 0.2% crypto tax, which has sparked controversy among digital asset platforms and their users.
On August 21, the Blockchain Association and Crypto Council for Innovation filed a complaint in Sangamon County Circuit Court against the Illinois Department of Revenue Director David Harris, Attorney General Kwame Raoul, and Sangamon County State's Attorney John Milhiser.
The plaintiffs argue that the tax is unlawful and request that it be declared so, as well as preliminary and permanent injunctions blocking its enforcement.
The Digital Asset Tax Act, which took effect on January 1, taxes digital assets at a rate of 0.2% when certain activities are conducted through a digital asset broker.
This means that even if a customer buys nothing, sells nothing, gains nothing, and transfers no ownership, the tax can still apply.
The complaint points out that Illinois previously treated digital assets similarly to other financial property for tax purposes, with income or capital gains potentially taxable.