Illinois crypto tax proposal faces legal challenge
The Digital Chamber (TDC), a prominent cryptocurrency lobbying group, has filed a lawsuit against the state of Illinois to block its proposed 0.2% digital asset tax law. The legislation, known as the Digital Asset Tax Act and passed on June 16, imposes this levy on businesses transacting or storing crypto assets for customers in the U.S., effective January 1, 2027. The lawsuit argues that Illinois' tax violates both federal and state constitutions by being discriminatory under existing laws like the Internet Tax Freedom Act. It also claims the law unfairly targets blockchain infrastructure over traditional financial systems without accounting for transaction outcomes or ownership changes. The Digital Chamber is seeking a court order to halt implementation of the tax. The legal challenge highlights growing tensions between states attempting to regulate crypto and industry groups resisting what they see as unfair taxation, potentially setting a precedent in state-level cryptocurrency policy.
Topics: crypto taxation Illinois legislation legal challenge