The legal fight over Illinois’ new 0.2% tax on digital asset transactions escalated on Friday as the Crypto Council for Innovation and the Blockchain Association filed a second lawsuit in Sangamon County Court. The complaint argues that the tax violates the U.S. Constitution, the Illinois Constitution, and the federal Internet Tax Freedom Act.
The contested measure was enacted as part of Illinois’ broader budget legislation and applies to companies based in Illinois or serving customers in the state with gross revenue of at least $100,000. Industry advocates say the tax unfairly singles out digital assets compared with traditional financial transactions.
CCI CEO Ji Kim said the levy imposes a uniquely punitive burden on digital assets based solely on the underlying technology rather than the nature of the transaction. The plaintiffs argue that taxing only digital asset activity while exempting equivalent traditional transactions illegally picks winners and losers through the tax system.
The new complaint follows a similar challenge filed last month by the Digital Chamber. Together, the cases represent a coordinated industry push against state-level tax policies that crypto groups see as discriminatory and potentially unconstitutional.
A ruling in favor of the plaintiffs could invalidate Illinois’ tax and discourage other states from adopting similar measures. A decision against the industry could embolden other jurisdictions. Legal experts say the constitutional questions involved could push the case to higher courts, potentially the U.S. Supreme Court.
