Digital Chamber sues Illinois over 0.2% crypto tax

The Digital Chamber, a crypto trade association led by CEO Cody Carbone, filed a complaint in Sangamon County Circuit Court on July 21 asking a judge to block the Digital Asset Tax Act before it takes effect on Jan. 1, 2027.

Governor J.B. Pritzker signed the tax into law on June 16 as part of Illinois’ fiscal year 2027 budget. The statute imposes a 0.2% levy on the gross value of digital asset business activity, covering exchanging, transferring and storing digital assets. It applies to firms based in Illinois or serving Illinois customers that report at least $100,000 in annual gross receipts. State budget documents estimate the tax will generate about $60 million annually once fully implemented.

The complaint focuses on the tax’s base. It argues the law applies to gross transaction value rather than to net gains or profits, meaning firms could owe tax on transfers that produce no profit or that produce a loss. The filing describes that treatment as burdensome for companies that handle high volumes of transfers with thin or negative margins.

The lawsuit advances three legal claims. It argues the tax violates the Illinois Constitution’s uniformity and due process provisions, burdens interstate commerce in breach of the U.S. Constitution’s Commerce Clause, and conflicts with the federal Internet Tax Freedom Act, which limits certain state taxes on internet-based transactions. The filing also asserts the statute treats blockchain-based activity differently than comparable traditional finance activity.

In a statement attached to the complaint, Carbone wrote, “Today we are asking the courts to protect consumers and our members and stop this unfair tax in Illinois.” The complaint notes the tax provision was added to the budget bill shortly before final legislative consideration, which the association says allowed little time for industry input.

No case number has been released and Illinois officials have not publicly responded to the complaint. With the law scheduled to take effect in just over five months, the Sangamon County court faces a limited window to decide whether the tax will be blocked before Jan. 1, 2027.