Crypto lobbying orgs ask court to suspend Illinois tax as legal case continues
Crypto lobbying groups are seeking a preliminary injunction to block Illinois' new 0.2% digital asset tax, arguing it is preempted by federal law. The industry claims the tax imposes significant compliance costs and violates constitutional rights, while the state maintains its authority to regulate.
Why it matters
This legal challenge represents a critical test for state-level taxation of digital assets and the extent of federal preemption in the crypto industry.
The two lobbying organizations first filed to block the tax last month , joining The Digital Chamber in arguing that federal law preempted the Digital Asset Tax Law enacted earlier this year. The 0.2% tax adopted on the last day of Illinois' legislative session would apply to any entities based in Illinois or that provide services in the state with gross receipts worth over $100,000, and will take effect on Jan. 1, 2027.
Wednesday's filing asks the Sangamon County Circuit Court to enact a preliminary injunction, suggesting that the two groups' member companies are already suffering "serious and irreparable harm" due to having to build systems to comply with the law.
In a statement, CCI CEO Ji Hun Kim said "companies are being asked to spend millions to build systems for a tax that violates their Constitutional rights without answers to basic questions about what is taxed and when."
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