TL;DR:
- The Digital Chamber filed a formal lawsuit in Sangamon County, Illinois, to block the Digital Asset Tax Act.
- The legislation enacted in June applies a 0.2% tax on digital asset transactions, transfers, and custody starting January 1, 2027.
- The tax affects businesses that generate a minimum of $100,000 annually in gross receipts from crypto services in the state.
The trade organization The Digital Chamber has filed legal action against the state of Illinois. The action aims to halt the enforcement of the cryptocurrency tax law approved to take effect next January 2027.
🧵1/ Today we filed suit in Sangamon County, IL, to stop the Digital Asset Tax Act. No one should be taxed differently because of how ownership of digital assets is recorded or transferred. pic.twitter.com/pv3J3FPybM
— The Digital Chamber (@DigitalChamber) July 21, 2026
The complaint was filed in the Sangamon County court, alleging that the regulation discriminates against transactions based on blockchain technology. According to the lawsuit filed by the association, the rule imposes unequal treatment on identical financial operations simply due to the technological infrastructure used to record ownership.
The legislation was signed into law in June by Governor JB Pritzker as part of the state fiscal budget. Official documentation indicates that the measure establishes a 0.2% tax on the total value of exchange, custody, and transfer operations executed by authorized brokers.
Legal Arguments and Scope of the Tax
The tax applies to entities with annual gross receipts of at least $100,000 obtained from crypto activities with local users. Unlike capital gains taxes, the tax amount is calculated on the gross transaction volume without considering whether the user made a profit or suffered a loss.
The inclusion of the legal text occurred during the late-night session prior to the final budget vote. The official statement from The Digital Chamber notes that the process lacked prior public hearings and open debates for citizen review.
The organization’s CEO, Cody Carbone, maintained that the legal action seeks to protect consumers against arbitrary tax policies. The entity argues in the filing that the provision violates the Commerce Clause, due process, and the federal Internet Tax Freedom Act.
Industry Rejection and Next Steps
Industry representatives warn about the repercussions of this tax precedent outside the financial sector. According to the claims in the lawsuit, similar justifications could be used in the future to tax artificial intelligence infrastructure or cloud payment networks.
Various ecosystem groups had already requested the removal of the clause prior to its legislative enactment. Illinois officials have not issued public comments regarding the litigation, keeping the enforcement date for the regulation set for January 1, 2027.
