Crypto Groups Sue to Block Illinois 0.2% Digital Asset Tax

Two crypto industry groups have asked an Illinois judge to halt the state’s new 0.2% tax on digital assets before it takes effect in January 2027.

Injunction filed in Sangamon County

The Crypto Council for Innovation and the Blockchain Association filed a motion for a preliminary injunction in Sangamon County Circuit Court, extending their challenge to the Digital Asset Tax Act.

They argue the statute conflicts with federal and state protections and would push crypto businesses to spend millions of dollars preparing for rules they say remain unclear.

How the levy works

The tax applies to 0.2% of the value of any digital asset exchanged, transferred, or stored through a digital asset broker.

That structure is unusual, since the amount owed tracks the value of the asset rather than the fee the broker charges.

Brokers would also have to register with the state, collect and remit the tax, and keep records, with civil and criminal penalties attached to violations.

Federal law and vague wording

The groups say the act singles out online activity while leaving comparable transactions in cash or gold untouched.

They wrote in the filing:

“The Act violates the federal Internet Tax Freedom Act by taxing internet commerce—activities involving digital assets—without taxing activities involving similar non-digital assets, such as using cash or buying gold.”