Crypto group sues Illinois to block 0.2% digital asset tax

The Digital Chamber sued Illinois to block a 0.2% tax on digital asset transactions, arguing it unfairly targets crypto and violates constitutional protections. The tax is set for January 2027.

The Digital Chamber, a leading crypto industry trade association, has filed lawsuits against Illinois to halt the enforcement of a new 0.2% tax on digital asset transactions, scheduled to begin in January 2027. This tax, introduced by Senate Bill 3019 and included in the state's FY2027 budget, applies to the total value of digital assets exchanged or transferred, not just profits or fees. It specifically targets firms operating in Illinois with gross receipts exceeding $100,000. The Chamber contends that the law unfairly singles out blockchain transactions for distinct tax treatment, violating both federal and state constitutions. They also argue that it is preempted by the Internet Tax Freedom Act. The legal actions seek both immediate and permanent injunctions to prevent the tax's enforcement, naming state officials as defendants. The crypto industry has widely criticized the measure, calling it the most punitive digital asset tax in the country. Concerns have been raised about its implementation and potential negative impact on the market.