The Crypto Council for Innovation and the Blockchain Association have filed a motion for a preliminary injunction in the Circuit Court of Sangamon County. The trade groups aim to block the enforcement of a 0.2% tax on cryptocurrency transactions in Illinois before it takes effect in January 2027.
The organizations argue that the tax is unconstitutional and violates federal and state due process laws, as well as the federal Internet Tax Freedom Act. According to the groups, the measure imposes significant compliance costs and forces companies to divert resources to systems for a tax that lacks clear regulatory definitions.
Governor JB Pritzker signed the legislation in June as part of the fiscal year 2027 budget. The law classifies the levy as a privilege tax applied to transaction volume rather than income. Illinois is the first state in the nation to implement such a tax on digital asset transactions.
In addition to the challenge from the Crypto Council for Innovation and the Blockchain Association, the Digital Chamber has filed a separate lawsuit against the state. The legal actions seek to prevent irreparable harm to digital asset firms operating within the jurisdiction.
Separately, the state is facing legal action from Kalshi regarding a law that bans sports event contracts, which took effect on July 1. Additionally, an executive order signed in April prohibits state employees from using prediction market platforms to prevent potential insider trading.
