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4 clusters · 15 sources · 41 days · First seen · Last updated

Illinois digital asset tax legal challenge

Overview

The Blockchain Association and the Crypto Council for Innovation (CCI) have initiated legal action in Sangamon County Circuit Court to block the Illinois Digital Asset Tax Act. Scheduled to take effect on January 1, 2027, the legislation imposes a 0.2% tax on the gross value of digital assets involved in specific exchanges, transfers, or storage services.

Plaintiffs argue the levy is unconstitutional and violates federal laws, including the Internet Tax Freedom Act and the Commerce Clause. They contend the tax targets gross value rather than profits, which could result in taxation even when a customer “buys nothing, sells nothing, gains nothing, and transfers no ownership.” Industry groups have filed a motion for a preliminary injunction, arguing that premature enforcement would cause irreparable harm by forcing companies to incur massive compliance and operational costs for a law they claim is invalid.

In late September 2026, the Illinois Department of Revenue released draft rules for the Digital Asset Tax Act (DATA). The rules clarify that the 0.2% privilege tax applies to all digital asset activities, including conversions, transfers, and custodial storage, regardless of profit or loss. The measure is projected to contribute approximately $60 million to the state budget. Under the proposed framework, crypto service providers operating in Illinois or earning over $100,000 annually from Illinois residents must register with the state; failure to comply is classified as a Class 3 felony.

On October 1, 2026, Illinois state officials and industry groups, including the Chamber of Digital Commerce, filed a joint motion in Sangamon County Circuit Court requesting a six-month delay. The motion asks to move the tax’s effective date from January 1, 2027, to July 1, 2027, to allow for the orderly briefing and adjudication of the ongoing legal challenges.

Entities

Crypto Council for Innovation · Illinois Department of Revenue · Blockchain Association · JB Pritzker · Illinois

Timeline

  1. [BUSINESS] 3 sources
    Illinois agrees to delay new crypto transaction tax until July 2027

    Illinois and crypto industry groups have requested a court delay for the state's 0.2% digital asset tax, moving its start date from January 2027 to July 2027 pending constitutional litigation.

  2. [BUSINESS] 6 sources
    Illinois drafts rules for 0.2% cryptocurrency transaction tax

    Illinois has drafted rules for its Digital Asset Tax Act, which will impose a 0.2% tax on all cryptocurrency transactions starting in 2027, regardless of profit or loss.

  3. [BUSINESS] 6 sources
    Illinois crypto tax challenged by industry trade groups

    Crypto trade groups are seeking a court injunction to block an Illinois 0.2% cryptocurrency transaction tax, citing unconstitutionality and massive, premature compliance costs.

  4. [BUSINESS] 6 sources
    Illinois crypto groups sue to block 0.2% digital asset tax

    Crypto industry groups have sued Illinois to block a 0.2% digital asset tax set for 2027, alleging the levy on asset value rather than profit is unconstitutional and discriminatory.

Sources

bitcoinethereumnews.com · blockchainreporter.net · coincu.com · coindeskjapan.com · coinpedia.org · criptotendencias.com · crypto.news · cryptobreaking.com · cryptobriefing.com · cryptoslate.com · news.bitcoin.com · npinvestor.dk · spacemoney.com.br · tronweekly.com · zycrypto.com

This summary has been updated 2 times: see revision history