Crypto Industry Launches First Major Legal Challenge to Illinois’ Digital Asset Tax

The Digital Chamber has filed a lawsuit to block Illinois’ upcoming crypto tax.

The industry advocacy group argues that the tax unlawfully targets blockchain transactions for discriminatory reasons.

Illinois Faces Legal Challenge Over Crypto Tax Law

Illinois’ Digital Asset Tax Act (DATA), scheduled to take effect on January 1, 2027, imposes a 0.02% levy on the full value of a digital asset every time it is transferred. The tax applies to crypto exchanges, wallet providers, and custodians based in the state or ones offering services that earn more than $100,000 in Illinois receipts.

The law is the first of its kind in the U.S., with critics who oppose it saying it would impose several layers of tax on a single transaction, which would, in turn, raise costs and discourage crypto activity in Illinois. Andreessen Horowitz crypto executive Miles Jennings even went as far as calling it one of the most “anti-crypto laws” in the United States.

TDC is now asking the court to stop enforcement of the tax provision, arguing that no one should be treated differently for transacting in digital assets. Furthermore, they say that the clause was added to the legislation the night before its final consideration, leaving no room for an actual hearing.

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