Crypto Industry Group Sues Illinois Over Planned 0.2% Transaction Tax

BitcoinWorld

Crypto Industry Group Sues Illinois Over Planned 0.2% Transaction Tax

The Crypto Council for Innovation (CCI), a prominent industry lobbying group, has filed a lawsuit against Illinois state authorities in an effort to block the implementation of a 0.2% cryptocurrency transaction tax. The tax, which is scheduled to take effect in January 2027, would be levied based on transaction volume rather than an investor’s income or profit, a structure that the CCI argues is unconstitutional and harmful to the state’s growing digital asset economy.

Legal Challenge and Constitutional Arguments

In its complaint, the CCI asserts that the tax violates both the U.S. Constitution and the Illinois Constitution. The group argues that the measure could result in double taxation, as transactions may be taxed at both the state and federal levels or across multiple jurisdictions. The lawsuit also contends that the law is overly vague, placing unclear burdens on residents and brokers while exposing them to potential civil and criminal penalties for non-compliance.

The tax, part of Illinois’s broader budget legislation, is designed to generate revenue from the growing use of digital assets. However, critics say the transaction-based model is fundamentally flawed, as it does not account for whether a transaction results in a profit or a loss. This approach, they argue, unfairly penalizes investors and businesses that may be trading at a loss or using cryptocurrencies for everyday purchases.