Crypto groups seek Illinois court injunction to halt 0.2% digital asset tax
Illinois court faces injunction request over crypto tax
On Wednesday, the Crypto Council for Innovation (CCI) and the Blockchain Association filed a motion in Sangamon County Circuit Court asking the judge to block Illinois’ new 0.2% digital asset tax before it becomes law on Jan. 1 2027.
Key points
- The tax would apply to any entity with gross receipts over $100,000 that is based in Illinois or provides services in the state.
- CCI and the Blockchain Association claim the tax is pre‑empted by the Internet Tax Freedom Act and the U.S. Constitution.
- The groups say companies would suffer “serious and irreparable harm” because they must spend millions on compliance systems.
- Both CEOs warned that if Illinois wins, other states might adopt similar taxes.
Details of the injunction request
The filing asks the court for a preliminary injunction, which would temporarily suspend the tax while the lawsuit proceeds. The motion argues that the tax treats digital assets differently from other financial services, violating state and federal law.
Industry response
CCI CEO Ji Hun Kim said companies are being asked to spend millions on a tax that “violates their Constitutional rights” without clear guidance on what is taxed. Blockchain Association CEO Summer Mersinger added that Illinois would not be able to use any projected revenue from the tax during the litigation, so the state “loses very little by waiting.”
What is confirmed
- The Illinois Digital Asset Tax Law was enacted earlier this year and sets a 0.2% tax on digital asset transactions.
- The tax is scheduled to take effect on Jan. 1 2027.
- CCI and the Blockchain Association filed a motion for a preliminary injunction on Sep. 9 2026.
- The motion was submitted to the Sangamon County Circuit Court.
Open questions
- The court has not yet ruled on whether the tax is pre‑empted by federal law or the Constitution.
- It is unclear how the court will assess the claim of “irreparable harm” to companies.
Why it matters
If the injunction is granted, the 0.2% tax would be delayed, affecting companies that would otherwise need to build costly compliance systems. A court ruling could also set a precedent for how states regulate digital assets.
Next steps
The court will consider the motion and issue a decision on the preliminary injunction. The underlying lawsuit, filed last month, will continue regardless of the injunction outcome.
