The Crypto Innovation Council (CCI) and the Blockchain Association have filed suit in Sangamon County, Illinois, challenging the state’s newly enacted digital asset tax. The law requires businesses that trade or store cryptocurrency for customers in Illinois to pay a tax equal to 0.2% of the transaction value. The plaintiffs say it violates the U.S. Constitution, the Illinois Constitution and the Internet Tax Freedom Act. The tax also applies to companies headquartered in Illinois or serving state residents with more than $100,000 in total revenue, and Illinois expects it to raise about $60 million for the state budget. Critics argue the levy is based on transaction value, so it must be paid even when a trader loses money on a crypto transaction.
The Crypto Innovation Council (CCI) and the Blockchain Association have filed suit in Sangamon County, Illinois, over the state’s newly approved digital asset tax.
The law requires companies that trade or store cryptocurrency for customers in Illinois to pay a tax equal to 0.2% of the transaction value. The plaintiffs say the measure violates the U.S. Constitution, the Illinois Constitution and the Internet Tax Freedom Act.
Under the law, the tax applies to companies headquartered in Illinois or providing services to Illinois residents, as long as their total revenue exceeds $100,000. Illinois expects the levy to generate about $60 million for the state budget.
Critics say the tax is assessed on transaction value, which means it still applies even if the taxpayer loses money on a crypto trade.
The Chamber of Digital Commerce filed a separate lawsuit last month.
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