Crypto lobby group Digital Chamber (TDC) has moved to block the state of Illinois’ 0.2% blanket digital asset tax rule.
In a lawsuit filed in Sangamon County, Illinois, the trade group argued that the move would “redress the unfair tax burden” the crypto tax rule would impose on users and businesses in the state.
TDC CEO Cody Carbone added:
Taxes should be carefully evaluated not only in terms of the revenue they generate but also in terms of fairness to those taxed. This was not the case here; because the provision was introduced into legislation the night before the bill was due for final consideration.
The Illinois law, which will go into effect in January 2027, imposes a 0.2% tax on all crypto transactions. This applies to gross transaction value. In fact, it does not take into account whether you make a loss or a profit or whether you carry money between your wallets.
You also have to pay typical capital gains tax on top of this fee, making it one of the most punitive crypto tax regimes in the US
Initially, industry hit State for crypto tax policy. Even state representative John Cabello introduced a measure that would repeal the tax law, citing the lack of public committee hearings before the law went into effect.
Beyond the rhetoric from the industry, the Digital Chamber was the first to take legal action to rectify the situation. inside caseThe trade group argued:
Plaintiff accordingly seeks a declaration that the Act is invalid and an injunction against its enforcement because it violates the Illinois Constitution, burdens interstate commerce, and is preempted by the Internet Tax Freedom Act.
US push for federal crypto tax regime remains unclear
The US does not currently have a single federal crypto tax regime, leaving states to chart their own paths. However, there is painprogressive pressure for crypto tax netincluding mining and staking.
The final proposals in Parliament were: backed by industry. In fact, the industry wants the bills to pass as is.
As of this writing, the proposals have not even received a committee vote. Given the narrow window before the November election, tax bills could be delayed until next year.
Final Summary
- Crypto trade group Digital Chamber (TDC) has filed to block the Illinois crypto tax rule.
- There could be a new push for a federal crypto tax regime after the November midterm elections.
