The Digital Chamber, representing 250+ blockchain firms, sued the Illinois Department of Revenue to block the 0.2% Digital Asset Tax Act that takes effect January 1, 2027 after Governor Pritzker signed Senate Bill 3019 in June; the law taxes exchange, transfer or storage of customer digital assets, requires broker registration and carries Class 3 felony penalties. The suit argues the levy discriminates by taxing assets based on how ownership is recorded and could chill crypto adoption, DeFi activity and tokenized asset use, asks the court to void the law, and notes a repeal bill (HB 5798) remains pending.

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In Brief

The Digital Chamber sued Illinois to block its new 0.2% crypto tax.
The suit says the levy discriminates by targeting how ownership is recorded.
The tax starts January 2027 and carries Class 3 felony penalties.

The Digital Chamber sued the Illinois Department of Revenue on Tuesday, asking a Sangamon County court to strike down the state’s new Digital Asset Tax Act before it takes effect.

The trade group represents more than 250 blockchain firms. It argues the 0.2% levy unfairly singles out digital assets based on the technology used to record ownership.

Inside Illinois’ Digital Asset Tax Act

Illinois enacted the Digital Asset Tax Act as Article 3 of Public Act 104-0468. The measure sets a 0.2% tax on the exchange, transfer, or storage of a customer’s digital asset.

Brokers must also register with the Department of Revenue. Violating the Illinois statute exposes them to Class 3 felony charges. The tax takes effect January 1, 2027.

Governor JB Pritzker signed Senate Bill 3019 into law in June. It drew heavy backlash from the crypto industry at the time, and the courts are now involved.

Illinois Crypto Tax Faces Legal Challenge Months Before Launch

The Digital Chamber’s lawsuit raises six claims under state and federal law. It argues that the tax treats identical property differently based only on how ownership is recorded.

“Put simply, this tax discriminates against people who transact in digital assets,” the group said.

A tokenized Treasury and a book-entry Treasury carry the same rights, the suit says. However, only the blockchain version is subject to tax. The filing compares the setup to taxing one email system but not another.

The group also warns that the definition could stretch far beyond crypto. It says future state taxes could reach AI-enabled settlement systems and cloud-based payment networks.

“Taxes should be carefully considered, not only for the revenue they produce but for the fairness of those being taxed. That was not the case here, as the provision slipped into legislation the night before the bill’s final consideration,” CEO Cody Carbone said.

The suit asks the court to declare the Act void and block enforcement. A repeal bill, House Bill 5798, remains pending in the legislature.

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