Illinois Digital Asset Tax Act Faces Joint Challenge from Blockchain Association and Crypto Council

The Blockchain Association and Crypto Council for Innovation have filed a joint lawsuit against Illinois' Digital Asset Tax Act. The law, set to take effect on January 1, 2027, would impose a 0.2% tax on digital asset transactions.

The industry groups argue that the tax violates the dormant Commerce Clause, the federal Internet Tax Freedom Act, and state due process protections. They claim that states cannot pass laws that place an undue burden on interstate commerce, and that Illinois' law would interfere with commerce outside the state's proper reach.

If allowed to stand, the law could become a model for other states looking to tax crypto transactions directly. If successfully challenged, it could limit how far state-level crypto taxation can go.