Crypto trade association The Digital Chamber has filed a lawsuit against the state of Illinois, challenging the newly enacted Digital Asset Tax Act that imposes a 0.2% tax on digital asset transactions. The suit, lodged in a circuit court on Tuesday, argues the law unfairly targets blockchain-based commerce and violates the U.S. Constitution by taxing transactions based on the underlying technology rather than the economic activity itself.
The tax, signed into law by Governor JB Pritzker as part of the state’s FY2027 budget, is scheduled to take effect on January 1, 2027. Industry groups have quickly condemned the measure, labeling it the “most punitive digital asset tax in the country.” In the 32-page complaint, TDC CEO Cody Carbone stated that the organization is not seeking special treatment but “equal treatment of economically identical property regardless of the technology through which ownership is recorded, transferred, or settled.” He also noted that the provision was inserted into legislation the night before final budget approval, bypassing proper scrutiny.
The Digital Chamber warns that if Illinois is allowed to enforce such a tax, other states could follow suit, applying similar discriminatory taxes to transactions using artificial intelligence, cloud-based payment networks, or other future technologies. The lawsuit asks the court to declare the law “void and unenforceable.” The move comes after months of opposition from crypto firms and federal officials, including CFTC Chair Michael Selig, who said Illinois lawmakers had “slammed the brakes on technological progress.”
With over 250 members globally—including Anchorage Digital, Chainlink Labs, and ICE—the Digital Chamber’s legal challenge could set a significant precedent for how digital assets are taxed across the United States.
