Illinois' Digital Asset Tax Law Under Fire in Blockchain-Backed Lawsuit
The Blockchain Association and the Crypto Council for Innovation (CCI) have filed a lawsuit against Illinois over its new Digital Asset Tax Act. The plaintiffs argue that the law goes beyond the state's constitutional authority by creating a tax specifically targeting digital-asset activity.
The Digital Asset Tax Act was passed through the Illinois legislature within hours, without sufficient debate or public notice. This has raised concerns about due process and the clarity of the law's requirements.
Ji Hun Kim, CEO of CCI, stated that a tax on digital assets with no equivalent tax for traditional assets 'unlawfully picks winners and losers through the tax code.'
The lawsuit also claims that the Illinois law violates the federal Internet Tax Freedom Act (ITFA), which restricts certain discriminatory taxes on Internet access and electronic commerce.