Digital Chamber sues Illinois over new 0.2% crypto tax

The Digital Chamber sues Illinois officials in Sangamon County court, seeking to block a 0.2% state crypto transaction tax signed into law in June and set for 2027. The group says the levy discriminates against digital asset users and was added to the budget without debate.

Cryptocurrency and blockchain advocacy organization The Digital Chamber filed a civil suit against Illinois Attorney General Kwame Raoul and the Department of Revenue’s David Harris, according to Cointelegraph. The filing argues the fiscal year 2027 crypto tax is “facially invalid” and should be blocked from implementation and enforcement.

Follow related regulation coverage in our Fintech & Crypto Alerts section as the case proceeds.

Key Takeaways

• The Digital Chamber sued Illinois officials over a new 0.2% crypto transaction tax.
• Governor JB Pritzker signed the tax into law in June inside the fiscal year 2027 budget.
• Crypto brokers would have to impose the levy or face potential prison time and fines.
• The Chamber says the tax discriminates against people who transact in digital assets.
• The tax is expected to take effect in 2027 unless blocked by the court.

What did the Digital Chamber file against Illinois?

In a Tuesday filing in the circuit court of Sangamon County, Illinois, The Digital Chamber alleged that the state’s crypto tax for fiscal year 2027 is “facially invalid.” Defendants named in the civil suit include Attorney General Kwame Raoul and the Department of Revenue’s David Harris.

The organization asked the court to stop implementation and enforcement of the measure. It also claimed the crypto tax was “slipped into the state’s budget” without debate or feedback from people potentially affected.

Why does the Chamber say the 0.2% crypto tax is unfair?

In a Tuesday blog post cited by Cointelegraph, the Chamber said no one should be taxed differently because of how ownership is recorded or transferred. It argued the Illinois levy “discriminates against people who transact in digital assets.”

The group further said the tax is universally applied, regardless of whether an investor realizes any gain or whether ownership is even being transferred. That claim is central to the suit’s discrimination argument.

When would Illinois’s crypto tax take effect?

The digital asset policy was included in a Senate bill as part of the Illinois state budget for fiscal year 2027. It requires crypto brokers to impose a 0.2% tax or face potential prison time and fines.

Governor JB Pritzker signed the budget bill into law in June. Reporting indicates the tax on crypto transactions is expected to go into effect in 2027, which is why the Digital Chamber is seeking a court block before enforcement begins.