The Digital Chamber, one of the largest crypto lobbying groups in Washington, files suit against Illinois this week. The organization wants to block the state’s new digital asset tax before it starts.
Illinois lawmakers passed the 0.2% levy last month as part of a $55.9 billion budget package. Governor JB Pritzker signed the measure into law in June, and it takes effect at the start of 2027.
The complaint lands in the Circuit Court of Sangamon County and names the state’s Department of Revenue and Attorney General as defendants. It runs more than 30 pages and targets the Digital Asset Tax Act directly.
Unlike a capital gains tax, the new rule does not care whether a transaction produces profit. It calculates charges from the value of the asset itself during any covered blockchain activity.
The lawsuit argues the tax breaches the uniformity and due process clauses in the Illinois constitution. It also claims violations of the Commerce Clause and the federal Internet Tax Freedom Act.
According to the filing, the law does not distinguish between gains and losses, between profitable and unprofitable transactions, between realized and unrealized appreciation, or between transfers that change ownership and transfers that do not. Instead it separates blockchain infrastructure from every other kind of financial system.
Federal law treats what an asset represents separately from the technology used to record its ownership, the complaint states. No other area of law draws a line based purely on recordkeeping method.
The Digital Chamber counts more than 250 companies among its members, including Anchorage Digital, Chainlink Labs, and Intercontinental Exchange, the parent company behind the New York Stock Exchange.
CEO Cody Carbone says the tax provision entered the budget the night before final consideration, leaving little room for scrutiny of its fairness or its compliance demands on smaller firms.
Before Pritzker signed the budget, The Digital Chamber and the Illinois Blockchain Association jointly asked officials to strip the tax out entirely rather than fold it into unrelated budget legislation.
The Crypto Council for Innovation separately urged the governor to use a line-item veto against the crypto provision, but that request went nowhere before the signing.
The group compares the approach to charging extra postage simply because a letter arrives by email instead of the mail, arguing the technology itself should not change the tax outcome.
Beyond blocking enforcement, the lawsuit asks a judge to award The Digital Chamber its legal fees and costs, plus a formal declaration that the statute cannot stand.
The Digital Chamber warns that letting Illinois proceed could invite other states to copy the model, potentially expanding similar treatment to AI systems or cloud based payment platforms next.
