Two trade groups challenge tax set to begin Jan. 1, 2027
The Blockchain Association and Crypto Council for Innovation filed a lawsuit Aug. 21 challenging Illinois’s Digital Asset Tax Act, which imposes a 0.2% tax on covered customer digital-asset activity and is scheduled to take effect Jan. 1, 2027.
The complaint was filed in Circuit Court of the Seventh Judicial Circuit in Sangamon County against Illinois Department of Revenue Director David Harris, Illinois Attorney General Kwame Raoul, and Sangamon County State’s Attorney John Milhiser, all named in their official capacities. The lawsuit alleges preemption and constitutional violations.
Under the Digital Asset Tax Act, a broker making or effectuating a sale of covered digital assets must collect the tax from the customer. Covered activity includes a single occurrence of exchanging, transferring or storing a digital asset as part of a business or on behalf of a customer who agreed to receive those services. Direct self-custody transfers do not trigger the tax; the taxable transaction requires activity supplied by a digital asset broker for valuable consideration.
The tax applies to remote brokers headquartered outside Illinois once their gross receipts from covered digital asset business activity sales to Illinois customers reach at least $100,000 over the preceding 12 months, tested quarterly. If a broker does not collect the tax, the customer must remit it by the 20th day of the following month. Once a broker meets the $100,000 threshold, it must collect, remit, and file returns for one year.
The Blockchain Association and CCI challenge comes roughly one month after The Digital Chamber announced a separate Sangamon County lawsuit against the same state officials. The two complaints carry different captions and defendant lineups. No joint schedule or court order coordinating, joining or consolidating the cases has been reported.
Filing the complaint did not suspend the Act. Unless a court enters relief or the law changes, Jan. 1, 2027 remains the operative compliance date for the 0.2% tax.
