The Digital Chamber filed a lawsuit challenging Illinois' 0.02% Digital Asset Tax, arguing it discriminates against blockchain transactions and violates state and federal constitutions.
Regulation & Gov ·
The Digital Chamber has initiated legal action to block Illinois' Digital Asset Tax Act, contending that the levy unlawfully singles out blockchain-based transactions for unfavorable treatment. The tax imposes a 0.02% charge on the total value of digital assets at each transfer and applies to in-state crypto exchanges, wallet providers, and custodians earning over $100,000 in Illinois revenue. The provision, set to take effect January 1, 2027, is the first of its kind nationally. The plaintiff argues the measure was introduced into the budget the night before final legislative consideration, preventing adequate deliberation.
The core challenge centers on whether the tax violates equal-treatment principles by singling out one asset class and recording method. The litigation contends that a transaction's tax treatment should not hinge on whether ownership is recorded via blockchain or traditional financial infrastructure, nor should the tax distinguish between profitable and loss-making transfers. The Digital Chamber seeks an injunction against enforcement, a judicial determination that the law violates state and federal constitutional provisions, and recovery of legal expenses.
The outcome remains uncertain. Illinois' approach contrasts with other jurisdictions—Texas has authorized Bitcoin holdings in state reserves, while Florida has restricted central bank digital currencies and relaxed rules for non-custodial operators. The suit does not yet reflect rulings on the core constitutional questions or the threshold for what constitutes discriminatory treatment under applicable law.