Crypto groups file injunction to stop Illinois 0.2% transaction tax

Industry groups move to block Illinois crypto tax

The Crypto Council for Innovation (CCI) and the Blockchain Association (BA) have filed a motion for a preliminary injunction in Sangamon County Circuit Court. They want to stop Illinois from enforcing a 0.2% tax on cryptocurrency transactions that is set to begin on January 1, 2027.

Key points

• CCI and BA argue the tax violates the U.S. Constitution, the state constitution, due‑process laws, and the Internet Tax Freedom Act.
• The tax, signed by Governor JB Pritzker in June, treats crypto transactions as a “privilege tax” based on transaction volume.
• Both groups claim firms would need to spend millions on compliance systems and could face criminal penalties.
• Another trade group, the Digital Chamber, filed a similar lawsuit earlier.
• Illinois is also pursuing legal action against prediction‑market platform Kalshi over a law banning sports event contracts.

What the court filing says

The motion, filed on Wednesday, asks the court to prevent the tax from taking effect, citing potential “irreparable harm” to digital‑asset companies.

Claims and concerns

CCI CEO Ji Hun Kim says companies are being forced to build costly compliance systems for a tax he calls unconstitutional. BA CEO Summer Mersinger warns that if the tax stands, other states may follow.

Unclear issues

The court has not yet ruled on the injunction, and the exact scope of the tax—what transactions are covered and how the rate will be applied—remains unsettled.

Why the challenge matters

If successful, the injunction would halt the first U.S. state tax that specifically targets cryptocurrency transactions, potentially influencing how other states approach crypto regulation.

Next steps

The case will proceed in the Sangamon County Circuit Court. A decision on the preliminary injunction could come before the tax’s January 2027 start date.

Sources

• Cointelegraph