Blockchain trade group sues Illinois over digital asset tax

A major blockchain trade group has sued the state of Illinois to block a first-of-its-kind tax on digital asset transactions before it takes effect. The Digital Chamber filed the lawsuit on Tuesday, July 21, 2026, in Sangamon County Circuit Court, seeking to have the state's Digital Asset Tax Act declared unconstitutional and to prevent its enforcement.

The law, signed by Governor JB Pritzker on June 16 as part of a budget package, imposes a 0.2% tax on the exchange, transfer, or storage of a customer's digital assets. Unlike a capital gains tax, this levy is applied to the total value of the asset involved in a transaction, not on any profit. The tax is scheduled to take effect on January 1, 2027.

The lawsuit names Illinois Department of Revenue Director David Harris and Attorney General Kwame Raoul as defendants. The Digital Chamber, which represents over 250 blockchain firms, argues the tax illegally discriminates against transactions that use blockchain technology for recording ownership. The group's complaint states the law creates an unequal tax burden for economically identical property, such as a tokenized Treasury security versus one recorded in a traditional book-entry...