Crypto groups challenge Illinois digital asset tax

Crypto groups are suing to block Illinois' 0.2% digital asset tax, arguing it is unconstitutional and harmful. They seek a court injunction before the law takes effect in January 2027.

Several leading cryptocurrency industry groups, including the Blockchain Association, Crypto Council for Innovation, and Digital Chamber, have filed lawsuits in Illinois to challenge the state's new Digital Asset Tax Act. Signed into law in June 2026, this act imposes a 0.2% tax on digital asset transactions and is scheduled to take effect on January 1, 2027. The industry groups argue that the tax is preempted by federal law and the Constitution, and unfairly targets digital assets compared to other financial services. They claim that companies are already facing significant compliance costs and potential irreparable harm, as they must develop systems to comply with the law under threat of criminal penalties. The lawsuits seek a preliminary injunction from the Sangamon County Circuit Court to block enforcement of the tax while legal challenges are underway. Industry leaders warn that if Illinois' law is upheld, it could set a precedent for similar taxes in other states, increasing the compliance burden for crypto businesses nationwide.