The Digital Chamber filed a lawsuit Wednesday in Sangamon County court, asking a judge to block Illinois's Digital Asset Tax Act before it kicks in next year. The trade group, which represents more than 200 blockchain companies, argues the law unconstitutionally singles out digital assets for a special tax based solely on the technology used to record ownership.
The tax and its penalties
Signed by Governor JB Pritzker in June 2025, Senate Bill 3019 imposes a 0.2% tax on the exchange, transfer, or storage of a customer's digital asset. Brokers must register with the Illinois Department of Revenue. Violating the statute is a Class 3 felony. The tax takes effect January 1, 2027 — less than six months away.
The lawsuit raises six claims under state and federal law. It compares the tax to taxing one email system but not another. The Digital Chamber warns the definition could extend to AI-enabled settlement systems and cloud-based payment networks.
How the provision got in
Digital Chamber CEO Cody Carbone said the provision was slipped into legislation the night before the bill's final consideration. The suit asks the court to declare the Act void and block its enforcement. The timing isn't great for Illinois: the state is already fighting to keep its crypto mining industry after a separate regulatory crackdown.
The repeal effort
A repeal bill, House Bill 5798, remains pending in the Illinois legislature. But with the session calendar tight and the tax set to take effect in January, the lawsuit may be the faster path. The Digital Chamber is betting a judge will agree the law discriminates against digital assets for no good reason.
For now, the industry is watching Springfield. House Bill 5798 hasn't moved in months.
