Two major cryptocurrency trade groups have sued the State of Illinois over a proposed 0.2% levy on digital assets, describing it as a first-in-the-nation tax that could affect trading, transfers, and custody when it takes effect on January 1, 2027.
Lawsuit Filed in Sangamon County
The Blockchain Association and the Crypto Council for Innovation filed a complaint on August 21 in Sangamon County Circuit Court against the Illinois Department of Revenue. The filing challenges the legality of the tax and its application to digital asset activity. Case details and the full complaint were not immediately available.
Scope of the 0.2% Levy
The plaintiffs contend the measure would impose a 0.2% charge tied to digital asset activity, with potential impacts on:
- Trades executed on cryptocurrency exchanges
- Transfers of digital assets between wallets or platforms
- Custody and storage services for crypto assets
Supporters of the lawsuit argue the levy could raise operational costs for exchanges, custodians, and market participants, and create compliance complexities for firms serving Illinois users.
Why It Matters
If implemented, Illinois’ 0.2% digital asset levy would be among the first state-level taxes of its kind, setting a potential template for other jurisdictions. The challenge underscores ongoing regulatory debates over how digital asset transactions should be taxed and supervised at the state level, alongside existing federal oversight.
Effective Date
The tax is scheduled to take effect on January 1, 2027, barring court action or legislative changes. Further proceedings in the Sangamon County case will determine whether the measure moves forward as planned.