The Crypto Council for Innovation and Blockchain Association filed a motion for preliminary injunction in Illinois state court on September 9, 2026, seeking to block enforcement of a 0.2% tax on cryptocurrency transactions scheduled to take effect January 1, 2027.
The two trade groups argue the tax is unconstitutional and would impose millions in compliance costs on companies. Illinois became the first state in the nation to single out crypto transactions for a dedicated tax when Governor JB Pritzker signed the measure into law in June 2026 as part of the fiscal year 2027 budget.
The tax is structured as a “privilege tax” applied to transaction volume rather than income. In their legal challenge, CCI and BA cite violations of the U.S. Constitution, Illinois state constitution, federal and state due process laws, and the federal Internet Tax Freedom Act.
Compliance Burden and Constitutional Questions
Ji Hun Kim, CEO of the Crypto Council for Innovation, framed the dispute around implementation uncertainty and financial burden. “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, all under the threat of criminal penalties,” Kim said.
Summer Mersinger, CEO of the Blockchain Association, argued that delaying enforcement would harm the state less than proceeding. “The state loses very little by waiting. Everyone else loses a great deal by forging ahead. And if this Act stands, Illinois will not be the last state to try it,” Mersinger said.
Related Legal Actions
The Digital Chamber, another trade group, filed a similar lawsuit challenging the tax days before CCI and BA filed their motion. Separately, Kalshi, a prediction market platform, filed a lawsuit against Illinois officials over a different law banning sports event contracts that took effect July 1, 2026. That law followed an executive order signed by Pritzker in April 2026 banning state employees from betting on prediction market platforms.
The preliminary injunction motion seeks to halt the tax’s implementation while the constitutional challenge proceeds through the courts. The tax is set to begin collection on January 1, 2027.
