Digital Chamber Sues Illinois Over Nation’s First Blockchain-Specific Transaction Tax

A leading industry group is taking legal action against a state tax law that singles out blockchain-based assets for special treatment.

The Digital Chamber alleges the Digital Asset Tax Act in Illinois imposes a 0.2% levy on exchanges, transfers and storage of digital assets without equivalent burdens on economically identical activities involving cash, stocks, or bonds.

It further contends the tax applies repeatedly to routine operations and reaches transactions with insufficient ties to the state via broad presumptions.

The Act taxes mere custody and treats each exchange, transfer and storage as a separate taxable occurrence.

Plaintiffs are seeking declaratory and injunctive relief, asserting violations of Illinois and U.S. constitutional provisions on equal protection, commerce, and federal internet tax rules.

Plaintiff’s members include digital asset exchanges, custodians, financial institutions, payment companies, stablecoin issuers, tokenization platforms, and blockchain infrastructure providers.

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