The Digital Chamber, a major US crypto lobbying group, has sued Illinois to prevent the state’s first-ever digital asset transaction tax from taking effect. The group argues that the new Digital Asset Tax Act is unconstitutional, unfairly targets blockchain transactions and conflicts with federal law. The court is requested to block the tax as it is scheduled to take effect in January 2027.
Lawmakers added the Digital Asset Tax Act to Illinois’ 2027 budget just before the legislative session ended. The law creates a 0.2% tax on digital asset transactions, such as exchanges, transfers, and some storage activities involving Illinois customers. The tax affects businesses in Illinois or those with over $100,000 in digital asset service receipts. Officials think it could bring in about $60 million each year.
The Digital Chamber says the law unfairly targets blockchain technology, while similar transactions in traditional finance are not taxed. The complaint also points out that the tax does not separate profitable from loss-making transactions, realized from unrealized gains, or transfers that change ownership from those that do not. It only looks at whether blockchain is used.
🧵1/ Today we filed suit in Sangamon County, IL, to stop the Digital Asset Tax Act. No one should be taxed differently because of how ownership of digital assets is recorded or transferred. pic.twitter.com/pv3J3FPybM
— The Digital Chamber (@DigitalChamber) July 21, 2026
The group also thinks the law is written so broadly that it could affect more than just cryptocurrency trading. They warn that enterprise blockchain, tokenized cloud computing, and even some artificial intelligence services might be included, causing confusion for businesses that were not meant to be taxed.
Digital Chamber CEO Cody Carbone said the tax was added to the state budget at the last minute and did not get enough discussion. He explained that the lawsuit is meant to protect both consumers and the Chamber’s 250-plus member companies from what they see as an unfair tax. Some members have started to spend money to get ready for the law, which will not go into effect until next year.
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