Crypto industry groups escalate fight against Illinois, asking court to block controversial crypto tax

Two cryptocurrency industry groups representing a slew of digital asset firms are escalating their legal fight in Illinois over its controversial crypto tax.

On Thursday in a Circuit Court in Sangamon County in Illinois, the Blockchain Association and the Crypto Council for Innovation filed a motion for a preliminary injunction to stop Illinois from enforcing its new tax legislation before it takes effect in January.

Over the summer, Illinois Gov. JB Pritzker signed into law the Digital Asset Tax Act as part of the state's fiscal year 2027 budget planning. The law imposes a 0.2% tax on digital asset transactions and is scheduled to go into effect in January 2027. Crypto industry groups like BA and CCI were quick to criticize the new tax, and by August, both groups and The Digital Chamber had sued Illinois over it.

In its 34-page motion, CCI and BA say the new tax would be unprecedented and that it is causing "irreparable harm" to its members.

"Plaintiffs—two leading digital-asset trade associations—and their members are left to spend millions of dollars to try to comply with the Act on an expedited basis, without meaningful guidance, and under the threat of the Act’s criminal penalties," the groups said. "Even if compliance were possible, the digital-asset industry will suffer irreparable harm if the Act takes effect."

The groups also said that the new tax law violates the Illinois Constitution because it treats digital assets differently than other assets. They also argue that the tax violates the Internet Tax Freedom Act — a federal law that bans state and local governments from taxing internet access and from placing discriminatory taxes on electronic commerce.

Pritzker's office did not immediately respond to a request for comment.