Industry groups argued in court filings that Illinois’ crypto tax, which applies even when a transaction yields no profit, could raise compliance costs and violate federal law.
The US Department of Justice, business and financial industry groups and a coalition of decentralized finance (DeFi) firms have backed a legal challenge to Illinois’ 0.2% digital asset tax, arguing that the measure unfairly targets cryptocurrency transactions and could impose taxes even when investors make no profit.
Over the past week, the Justice Department filed a statement of interest, while the US Chamber of Commerce and the Securities Industry and Financial Markets Association (SIFMA) submitted an amicus filing. A coalition that includes venture capital firms Andreessen Horowitz and Paradigm as well as crypto protocols Uniswap and Aave Labs also filed a brief, according to a Thursday announcement from the Blockchain Association and Crypto Council for Innovation.
The law, enacted in June, imposes a 0.2% tax on the value of digital assets exchanged, transferred or stored, regardless of whether a transaction generates a profit.
The Digital Chamber sued Illinois Attorney General Kwame Raoul and state revenue official David Harris in July, followed by a separate challenge from the Blockchain Association and Crypto Council for Innovation in August. Originally scheduled to take effect on Jan. 1, 2027, the tax was delayed until July 1, 2027, allowing more time for the legal challenges.
Illinois had projected the digital asset tax would generate $60 million in fiscal year 2027 revenue, according to estimates from the governor’s budget office.
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