Two crypto industry trade groups have escalated their legal fight against Illinois' Digital Asset Tax Act, filing a motion for a preliminary injunction in Sangamon County Circuit Court. The Blockchain Association and the Crypto Council for Innovation are seeking to block the controversial tax before it takes effect in January 2027.
The law, signed by Governor JB Pritzker as part of the state's fiscal year 2027 budget planning, imposes a 0.2% tax on digital asset transactions. Industry groups argue the act creates unclear and unlawful tax obligations that could force digital asset businesses to spend millions on compliance under the threat of felony criminal penalties.
In a 34-page motion, the groups called the tax 'unprecedented' and said it is causing 'irreparable harm' to members. The filing also contends the law violates the Illinois Constitution by treating digital assets differently from other assets, and that it violates the federal Internet Tax Freedom Act, which bans discriminatory taxes on electronic commerce.
The legal challenge follows an earlier lawsuit filed in August by the Blockchain Association, the Crypto Council for Innovation and The Digital Chamber after Pritzker signed the measure. Pritzker's office did not immediately respond to a request for comment. If the injunction is granted, the case could delay or dismantle the tax framework and set a precedent for how other states approach digital asset taxation.
