Illinois Crypto Tax Faces Legal Challenge

Trade groups are challenging Illinois's new digital asset tax, seeking to block its implementation before it takes effect on January 1, 2027. The Crypto Council for Innovation, the Blockchain Association, and the Digital Chamber have filed separate lawsuits arguing the 0.2% levy on digital asset business activities is unconstitutional and would impose undue financial burdens on companies. The Digital Asset Tax Act, signed into law by Governor JB Pritzker in June 2026 as part of the fiscal year 2027 budget, targets transactions, transfers, and custody services provided by brokers. The tax applies to entities with more than $100,000 in Illinois-connected gross receipts from digital asset activities. Illinois is the first state to enact such a targeted tax on the cryptocurrency industry. Plaintiffs contend the law violates several constitutional and federal protections. They argue it discriminates against interstate commerce by taxing digital asset activities differently from equivalent traditional financial services, thereby infringing on the Commerce Clause.