Digital Chamber sues to block Illinois 0.2% crypto tax
The Digital Chamber is suing Illinois to block a 0.2% cryptocurrency transaction tax, arguing the levy unfairly targets digital asset holders and creates fresh compliance risks for brokers.
The Digital Chamber has filed a lawsuit against Illinois officials to block a 0.2% tax on cryptocurrency transactions scheduled to take effect in 2027. The legal challenge targets a provision signed into law in June by Governor JB Pritzker as part of the state's fiscal year 2027 budget.
If enforced, the measure would require crypto brokers to collect the levy or face potential prison sentences and financial penalties. For market participants, the tax presents a structural cost headwind because it applies regardless of whether an investment yields a profit. Furthermore, the tax is triggered even if there is no actual transfer of ownership, creating a unique liability not typically found in traditional equities or commodities markets.
Filed Tuesday in the circuit court of Sangamon County, the civil suit names Illinois Attorney General Kwame Raoul and Department of Revenue official David Harris. The advocacy group argues the policy is "facially invalid," claiming the crypto tax was "slipped into the state’s budget" without public debate or feedback from those affected.
“No one should be taxed differently because of how ownership is recorded or transferred,” the Chamber wrote in a Tuesday blog post accompanying the filing. The organization asserts the framework unfairly singles out digital asset users compared to those transacting in traditional financial instruments.
“Put simply, this tax discriminates against people who transact in digital assets,” the group stated. “This tax is universally applied, regardless of whether the investor realizes any gain, or whether ownership is even being transferred.”
The compliance burden falls directly on digital asset exchanges and brokerages operating within the state. By threatening prison time for non-compliance, Illinois has significantly raised the regulatory stakes for crypto firms doing business in the region. The outcome of this litigation will be closely watched by institutional investors and industry executives as a critical test case for state-level taxation of digital assets.
