Wire flash
PoliticsDigital Chamber sues Illinois to block Digital Asset Tax Act
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
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.
Source report
By: Anand Sinha Source: TheStreet Reading Time: 1 min
The Digital Chamber, a prominent cryptocurrency lobbying organization, filed a lawsuit against the U.S. state of Illinois on July 21 in an effort to halt a proposed tax plan.
The Digital Asset Tax Act
Illinois' Digital Asset Tax Act, passed and approved on short notice on June 16, imposes a 0.2% tax on businesses that transact or store crypto assets for their customers within the state.
Key details of the law:
- Applies a 0.2% tax on "receiving any digital asset business activity"
- Takes effect on January 1, 2027
- Applies to firms based in Illinois or providing services to state residents
- Affects businesses with total gross receipts of at least $100,000
Legal Challenge
The Digital Chamber alleges that the tax proposal violates both the U.S. Constitution and the Illinois state constitution, and is preempted by federal tax law. The group specifically cited the Internet Tax Freedom Act, which prohibits discriminatory state and local taxation of e-commerce.
"The Act does not distinguish between gains and losses, between profitable and unprofitable transactions, between realized and unrealized appreciation, or between transfers that change ownership and transfers that do not. It distinguishes only between traditional financial infrastructure and blockchain infrastructure." — The Digital Chamber, in its lawsuit
What the Lawsuit Seeks
The crypto lobbying group is asking a federal judge to:
- Halt the state of Illinois from enacting the 0.2% crypto tax
- Award any fees and costs to The Digital Chamber (TDC)
This story was originally published by TheStreet on July 27, 2026, where it first appeared in the TAXES section. Add TheStreet as a Preferred Source by clicking here.
Source
Yahoo FinanceWestern
Part of this Story
Illinois Crypto Tax Proposal Hit by Lawsuit from Digital Chamber