The Digital Chamber, a trade group representing the blockchain and digital asset industry, has filed a lawsuit against Illinois officials over a new state tax on digital asset transactions. The group alleges the 0.2% tax discriminates against people who transact in digital assets and should be blocked from implementation and enforcement.
The tax and its scope
Illinois passed a law imposing a 0.2% tax on digital asset transactions, including purchases, sales, and exchanges of cryptocurrencies and other digital tokens. The tax applies to transactions conducted through exchanges or peer-to-peer, with the state aiming to generate revenue from the growing digital economy. Critics say the tax is broad and could capture everyday transactions like buying a coffee with Bitcoin.
Why the Digital Chamber is suing
The Digital Chamber argues the tax violates the U.S. Constitution's Commerce Clause by discriminating against digital asset transactions compared to traditional financial transactions. The group claims the tax singles out a specific method of payment, placing an undue burden on users of digital assets. In the lawsuit, the Chamber says the tax is “unconstitutional and should be permanently blocked.” The suit names Illinois Governor JB Pritzker, Attorney General Kwame Raoul, and the Illinois Department of Revenue as defendants.
What the lawsuit seeks
The Digital Chamber is asking a federal court to issue an injunction preventing the state from implementing or enforcing the tax. The group also seeks a declaratory judgment that the tax is unconstitutional. The lawsuit was filed in the U.S. District Court for the Northern District of Illinois. No hearing date has been set yet.
Next steps
The case will proceed through the court system, with Illinois officials expected to respond to the complaint. The Digital Chamber says it will push for a swift resolution to prevent the tax from taking effect. For now, the 0.2% tax remains on the books, but its enforcement is uncertain pending the lawsuit.
