The Crypto Council for Innovation (CCI) and Blockchain Association are asking an Illinois court to temporarily halt the state’s new crypto tax while their broader legal challenge moves forward.
The two industry groups filed a motion for a preliminary injunction Wednesday, several weeks after suing to prevent the tax from taking effect. Their latest filing seeks to stop enforcement before the law’s scheduled implementation as the crypto industry continues its court battle against the measure.
CCI and Blockchain Association initially joined forces with The Digital Chamber in challenging the tax last month. The groups argue that federal law prevents Illinois from imposing the levy under the Digital Asset Tax Law, which was approved earlier this year.
The legislation established a 0.2% tax on certain digital asset transactions involving entities based in Illinois or companies providing services within the state. It applies to businesses with gross receipts exceeding $100,000 and is scheduled to take effect on Jan. 1, 2027.
In their Wednesday filing with the Sangamon County Circuit Court, the organizations argued that their member companies are already facing “serious and irreparable harm” because they must spend resources developing systems to comply with the new requirements.
CCI CEO Ji Hun Kim said companies are being forced to spend millions preparing for a tax that the organization believes violates their constitutional rights, while key questions remain about which transactions will be taxed and when.
Blockchain Association CEO Summer Mersinger made a similar argument, saying Illinois would not be able to use the revenue it expects to collect while the legal dispute is unresolved. She argued that delaying implementation would impose little cost on the state while preventing potentially significant losses for businesses.
The latest filing largely repeats the industry’s earlier legal claims. The groups contend that both the Internet Tax Freedom Act and the U.S. Constitution prevent Illinois from imposing its tax on digital asset transactions.
They also argue that Illinois is creating an unequal tax treatment for digital assets compared with traditional financial services. According to the filing, the state generally does not impose sales taxes on transactions or services involving financial assets, instead taxing related income and capital gains. Illinois’ sales and use tax laws also largely exclude intangible personal property, while specifically exempting money and precious metals.
Mersinger warned that the case could have implications beyond Illinois. She suggested that if the state succeeds in defending the tax, other states could follow its approach and introduce similar levies on digital asset activity.
The court’s decision on the preliminary injunction could therefore determine whether Illinois’ tax takes effect as scheduled while the broader constitutional and federal-law challenges continue.
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