Digital Chamber Sues Illinois Over First-Ever 0.2% Crypto Tax

Carbone framed the lawsuit as a consumer-protection fight. "Today we are asking the courts to protect consumers and our members and stop this unfair tax in Illinois," he said. The complaint also claims the taxing provision "slipped into legislation the night before the bill's final consideration," giving the industry little chance to respond.

The complaint argues the tax violates the Illinois Constitution's uniformity and due process clauses. It also says the tax burdens interstate commerce under the U.S. Constitution's Commerce Clause and conflicts with the federal Internet Tax Freedom Act, which generally bars states from taxing internet-based transactions in a discriminatory way.

The complaint states that the Illinois law "distinguishes only between traditional financial infrastructure and blockchain infrastructure," taxing digital asset activity while leaving functionally identical traditional finance transactions untouched.

When Pritzker signed the bill, a16z Crypto's Miles Jennings called it "one of the most anti-crypto laws in the U.S." The Crypto Council for Innovation and the Illinois Blockchain Association had already urged lawmakers to repeal the provision before it went into force.

No case number has been made public. Illinois officials have not issued a public response to the complaint. The state has roughly five months before the law is scheduled to take effect, giving the Sangamon County court a narrow window to rule.