Trade groups seek to block Illinois crypto tax before January effective date

Trade groups representing the digital‑asset industry have moved to stop Illinois from enforcing a 0.2% tax on cryptocurrency transactions that is slated to take effect on Jan. 1, 2027.

Legal action filed

The Crypto Council for Innovation (CCI) and the Blockchain Association (BA) filed a motion for a preliminary injunction in the Circuit Court of Sangamon County. The motion seeks to prevent the state from imposing the tax while the groups pursue a broader lawsuit challenging its legality.

Arguments against the tax

The plaintiffs contend that the tax violates constitutional protections, due‑process requirements and the federal Internet Tax Freedom Act. They also argue that the tax forces companies to spend millions on compliance systems without clear guidance on what transactions are taxable or when the tax applies, all under threat of criminal penalties.

Background of the legislation

Illinois Governor JB Pritzker signed the measure into law in June as a “privilege tax” within the state’s fiscal year 2027 budget. The law treats crypto transactions as taxable based on transaction volume rather than income, making Illinois the first state to single out cryptocurrency in this way.

Related challenges

• The Digital Chamber filed a similar lawsuit days earlier.
• Prediction‑market platform Kalshi has sued Illinois over a July 1 law banning sports‑event contracts, claiming it conflicts with federal law.
• An executive order signed by Governor Pritzker bans state employees from betting on prediction‑market platforms.