Illinois Crypto Groups Sue State Over New Digital Asset Tax
The Blockchain Association and Crypto Council for Innovation have filed a lawsuit against Illinois to block a new digital asset tax scheduled to take effect on January 1, 2027. The tax imposes a 0.2% levy on the value of digital assets involved in specified exchanges, transfers, or storage services statewide.
The plaintiffs allege that the tax violates federal and state laws, including the Internet Tax Freedom Act, which prohibits discriminatory internet taxation. They also claim that the tax is too vague to enforce fairly due to undefined terms involving valuation, storage, and business presence.
The complaint seeks a declaration that the Digital Asset Tax Act is invalid and requests preliminary and permanent injunctions preventing Illinois officials from implementing or enforcing it. The state has estimated that the tax could generate approximately $60 million annually, but this remains a budget estimate rather than guaranteed revenue.
The lawsuit is the second industry challenge to the Illinois crypto tax, with the Digital Chamber filing a separate case in July.