Crypto industry groups seek injunction to block Illinois digital‑asset tax

Industry groups seek injunction

The Blockchain Association and the Crypto Council for Innovation filed a motion in Sangamon County Circuit Court to stop Illinois from enforcing a new digital‑asset tax before it takes effect in January 2027.

Key points

• Illinois' Digital Asset Tax Act imposes a 0.2% tax on every digital‑asset transaction.
• The tax is set to begin in January 2027.
• Industry groups argue the tax is unprecedented and would cause irreparable harm.
• They claim the law violates the Illinois Constitution and the federal Internet Tax Freedom Act.

Tax details

The Digital Asset Tax Act, signed by Governor JB Pritzker, adds a 0.2% levy on each transaction involving cryptocurrencies or other digital assets. The state plans to enforce it as part of its fiscal year 2027 budget.

Groups' claims

In a 34‑page filing, the groups say members would have to spend millions to comply without clear guidance and face possible criminal penalties. They say even if compliance were possible, the industry would suffer irreparable harm.

Legal challenges

The motion argues the tax treats digital assets differently from other property, violating the Illinois Constitution. It also asserts a conflict with the Internet Tax Freedom Act, which prohibits discriminatory taxes on electronic commerce.

What is confirmed

The filing of the preliminary‑injunction motion, the 0.2% tax rate, and the planned effective date of January 2027 are documented in the court filing and public statements.

What remains uncertain

The court’s decision on whether the tax indeed violates the state constitution or the federal Internet Tax Freedom Act has not yet been made.

Why it matters

If the tax is upheld, companies that buy, sell or transfer digital assets in Illinois could face an additional cost on each transaction, potentially affecting business operations and pricing.

Sources

• The Block

Read also: U.S. House Panel Releases Crypto Tax Bill Before Hearing