Illinois crypto tax challenged by industry trade groups

Crypto industry trade groups, including the Crypto Council for Innovation (CCI) and the Blockchain Association (BA), have filed a motion for a preliminary injunction in the Circuit Court of Sangamon County to block an upcoming Illinois cryptocurrency tax. The tax, a 0.2% levy on transaction volume enacted as part of the state’s fiscal year 2027 budget, is scheduled to take effect in January 2027.

The groups argue that enforcing the tax would cause irreparable harm to companies by forcing them to incur massive compliance and operational costs before the law even begins. They contend that firms are being pressured to build complex systems for a tax they claim is unconstitutional and violates federal laws, including the Internet Tax Freedom Act.

Illinois is the first U.S. state to specifically target cryptocurrency transactions with such a measure, which is categorized as a ‘privilege tax.’ Industry leaders have stated that the lack of clarity regarding specific taxable details, combined with the threat of criminal penalties, is diverting essential resources and personnel away from other priorities.