Illinois Crypto Tax Proposal Hit by Lawsuit from Digital Chamber
The Digital Chamber, a cryptocurrency lobbying organization, sued the U.S. state of Illinois on July 21, 2026, to halt the proposed Digital Asset Tax Act. The law, passed on June 16, imposes a 0.2% tax on businesses transacting or storing crypto assets for customers in Illinois, effective January 1, 2027. It applies to firms based in Illinois or serving state residents with gross receipts of at least $100,000. The lawsuit alleges the tax violates both the U.S. and Illinois constitutions and is preempted by the federal Internet Tax Freedom Act, which prohibits discriminatory state taxation of e-commerce. The Digital Chamber argues the tax does not distinguish between gains and losses, profitable and unprofitable transactions, or realized and unrealized appreciation, targeting blockchain infrastructure unfairly. The group asks a federal judge to block the tax and award legal fees.
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