Crypto lobby group sues Illinois over new 0.2% digital asset tax

Key facts

• The Digital Chamber is suing Illinois over a new 0.2% tax on digital asset transactions.
• The group alleges the tax violates state and federal constitutions and federal law.
• The lawsuit claims the tax discriminates against digital asset activities compared to traditional finance.
• The Digital Asset Tax Act applies to entities providing digital asset services with gross receipts over $100,000.
• The tax is scheduled to go into effect in January 2027.

The Digital Chamber, a cryptocurrency and blockchain advocacy organization, has filed a lawsuit against the State of Illinois to block the newly enacted Digital Asset Tax Act. The group contends that the tax, set to take effect in January 2027, violates the U.S. and Illinois constitutions, as well as federal law, including the Internet Tax Freedom Act.

The lawsuit argues that the tax unfairly targets digital asset activities by imposing a 0.2% tax on entities providing digital asset services with gross receipts exceeding $100,000, while treating similar activities in traditional finance differently. The Digital Chamber asserts that the tax discriminates against individuals based on the technology used for ownership recording or transfer, and that it was included in the state budget without adequate debate or feedback.

The organization is seeking a court injunction to prevent the law's enforcement before its scheduled implementation. The Digital Chamber has also invited other stakeholders to join the legal challenge.