Blockchain Association and Crypto Council challenge Illinois Digital Asset Tax Act with expedited legal action.
Regulation & Gov ·
The Blockchain Association and Crypto Council are pursuing expedited legal proceedings against Illinois's Digital Asset Tax Act, which imposes a 0.2% transaction levy on cryptocurrency transfers. The challenge represents organized industry pushback against what the groups view as an unfavorable state-level tax regime amid a broader landscape where regulatory treatment of digital assets remains fragmented across jurisdictions.
Illinois's approach stands apart from most global frameworks. While the United States treats crypto gains as property under federal law, with short-term profits taxed at ordinary income rates up to 37% and long-term gains at preferential rates, the Illinois transaction tax applies a flat rate to movement of assets rather than only on realized gains. This differs from models elsewhere: Germany exempts holdings over one year, France levies a flat 30% on gains, and the UK applies capital gains tax rules with an annual exempt amount.
The legal action's success and timeline remain unresolved. The groups have not disclosed the specific grounds for their constitutional challenge or whether state officials plan to defend the statute. Clarity on whether the levy will be blocked, modified, or upheld could reshape how other states structure digital asset taxation.