The Digital Chamber sued Illinois over its 0.2% Digital Asset Tax Act, arguing the measure discriminates against blockchain-based transactions and was slipped into legislation at the last minute.
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The Digital Chamber filed a lawsuit in Sangamon County court on July 21, challenging Illinois's Digital Asset Tax Act. The trade group is asking a judge to block the law before it takes effect Jan. 1, 2027. It is the first crypto industry coalition to sue the state over the measure.
The law imposes a 0.2% tax on certain digital asset business activities. The Digital Chamber's complaint argues the tax discriminates based on the technology used to record or transfer ownership, treating crypto transactions differently from similar activity in traditional finance.
Cody Carbone, CEO of The Digital Chamber, said the provision "slipped into legislation the night before the bill's final consideration." He added that taxes "should be carefully considered, not only for the revenue they produce but for the fairness of those being taxed."
The group said its members are already spending money on compliance preparations even though the law does not take effect for another 18 months. The Digital Chamber also warned that the tax language could extend beyond pure crypto transactions to areas like artificial intelligence and cloud computing, where blockchain-based ledgers might be used.
The organization invited other stakeholders to join the legal challenge as the case moves forward. The court has not yet set a hearing date.
The lawsuit is the latest legal pushback against state-level crypto taxation. Illinois joins a growing list of states that have proposed or passed digital asset tax measures, though it is among the first to face a direct legal challenge from an industry trade association.
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