# Illinois digital asset tax legal challenge > Live situation record from CLSTR: https://clstr.news/situations/illinois-digital-asset-tax-legal-challenge > Updated: 2026-09-09T16:08:15.000Z. Sources: 11. Developments: 2. 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.” Following the initial lawsuit, industry groups filed a motion for a preliminary injunction. They argue that enforcing the tax prematurely would cause irreparable harm by forcing companies to incur massive compliance and operational costs to build complex systems for a law they claim is invalid. Industry leaders noted that the lack of clarity and the threat of criminal penalties are diverting essential resources from other priorities. ## Timeline ### 2026-09-09: 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. 6 sources. https://clstr.news/cluster/illinois-crypto-tax-challenged-by-industry-trade-groups ### 2026-08-22: 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. 6 sources. https://clstr.news/cluster/illinois-digital-asset-tax-faces-legal-challenge-from-crypto-groups --- Cite as: Illinois digital asset tax legal challenge. CLSTR, https://clstr.news/situations/illinois-digital-asset-tax-legal-challenge