Crypto lobby group Digital Chamber sues Illinois to block digital asset tax

The Digital Chamber has filed a major lawsuit against the Illinois Department of Revenue to strike down the state’s newly enacted Digital Asset Tax Act. Slipped into the annual state budget last month, the law slaps a 0.2% levy on the exchange, transfer, or storage of digital assets. The prominent cryptocurrency trade association is asking a federal judge to block the measure before it officially takes effect on January 1, 2027.

In its 32-page legal complaint, the trade group argues the unconstitutional law unfairly discriminates against blockchain infrastructure. They point out that the statute arbitrarily targets digital assets based entirely on the underlying technology used to record ownership rather than the economic substance of the transaction. Furthermore, the industry group warns that the policy violates the federal Internet Tax Freedom Act and could harm broader technological innovation.

The legal battle marks the very first time an industry trade group has sued to halt a state-level cryptocurrency transaction tax. Industry advocates claim the tax is highly impractical, as it applies blindly regardless of whether an investor realized a financial gain or a loss.