Crypto group sues Illinois over 0.2% blockchain tax

The Digital Chamber filed a lawsuit on Tuesday in an Illinois circuit court seeking to strike down the state’s Digital Asset Tax Act. The law, signed last month by Governor JB Pritzker as part of the FY2027 budget, imposes a 0.2% levy on digital asset transactions starting in January 2027. The trade group is asking the court to declare the measure "void and unenforceable" for violating the U.S. Constitution.

At the center of the 32-page complaint is the assertion that Illinois is illegally penalizing a specific technology. The group emphasized it is not seeking special treatment, but rather the "equal treatment of economically identical property regardless of the technology through which ownership is recorded, transferred, or settled." For institutional investors and market professionals, the case represents a critical test of whether states can impose targeted transaction costs on blockchain infrastructure while leaving traditional financial equivalents untouched.

The financial stakes extend well beyond Illinois' borders. The complaint warns that if the state successfully taxes commerce simply because it utilizes a blockchain, other jurisdictions could apply identical logic to artificial intelligence-enabled settlement systems or cloud-based payment networks. A fragmented patchwork of technology-specific levies would fundamentally alter the cost structure for deploying digital assets and emerging technologies across the US market.

Industry backlash against the measure has been swift, with critics labeling the levy the "most punitive digital asset tax in the country." Beyond the rate itself, market participants have raised serious questions about how the law will actually be implemented in practice. TDC CEO Cody Carbone condemned the legislative process, noting that "the provision slipped into legislation the night before the bill’s final consideration."

This legal challenge carries significant institutional weight. TDC boasts a global membership of over 250 entities, including Anchorage Digital, Chainlink Labs, and ICE, the owner of the New York Stock Exchange. The involvement of traditional financial heavyweights underscores the broader market concern that singling out digital assets creates an unlevel playing field.

The conflict has also drawn federal scrutiny. Commodity Futures Trading Commission's Michael Selig lambasted Illinois lawmakers, accusing them of having "slammed the brakes on technological progress." As the January 2027 implementation date approaches, this litigation will force courts to balance state revenue strategies against constitutional requirements in a rapidly digitizing economy.