Crypto Advocates Sue Illinois Over Digital Asset Tax

The Crypto Council for Innovation and Blockchain Association have filed a fresh lawsuit against Illinois over its newly approved 0.2% tax on crypto activity.
The crypto industry is mounting additional legal opposition to Illinois’ new tax, which charges businesses for handling or safeguarding digital assets for customers in the state.
CCI and the Blockchain Association filed the lawsuit Friday, arguing that the tax violates the U.S. Constitution, the Illinois Constitution and the Internet Tax Freedom Act.
The latest legal action follows a separate lawsuit brought last month by the Digital Chamber challenging the same tax.
CCI leader Ji Kim said the measure unfairly targets digital assets based on the technology involved rather than the nature of the underlying transaction.
The lawsuit, filed in Sangamon County, seeks to prevent Illinois from enforcing the tax on companies located in the state or serving Illinois residents with more than $100,000 in total receipts.
The tax could generate an estimated $60 million for Illinois’ budget, but opponents argue businesses could owe it even when their crypto activities result in losses because the levy is tied to transaction volume.
Blockchain Association CEO Summer Mersinger said Illinois’ tax could discriminate against digital commerce, increase uncertainty for businesses and consumers, and create divisions within the broader U.S. crypto market.