The Digital Chamber has sued the state of Illinois in an effort to stop a 0.2% crypto transaction tax from taking effect in the state’s 2027 fiscal year. The U.S. digital asset advocacy group argues the tax is “facially invalid” and says it targets digital asset users without regard to whether they actually made money on a trade.
Lawsuit filed in Sangamon County
The group filed the case Tuesday in the Sangamon County circuit court in Illinois. It named Illinois Attorney General Kwame Raoul and Department of Revenue Director David Harris as defendants, and also announced the lawsuit on X.
According to The Digital Chamber, the 0.2% tax provision was slipped into the state budget process without a public hearing or any solicitation of comments from the people affected by it.
Tax applies even if no profit was made, group says
In a blog post published Tuesday, The Digital Chamber wrote: “No one should be taxed differently simply because the record or method of ownership transfer is different. Put simply, this tax discriminates against people who transact using digital assets.”
The group said the 0.2% levy is drafted as a generally applicable charge, meaning investors could owe it whether or not they realized gains, and even in cases where ownership may not actually have changed hands.
Measure came through the state budget bill
The tax originated in an Illinois Senate appropriations bill and was included as part of the state budget for fiscal year 2027. The report says the bill requires crypto brokers to collect the 0.2% tax. Failure to do so could bring penalties, including fines and imprisonment.
Illinois Governor JB Pritzker signed the bill into law in June this year.
Cost concerns for active traders and large holders
Although 0.2% may appear modest, the report says the cumulative cost could become significant for high-frequency traders and for investors with large crypto holdings.
Part of a broader U.S. tax enforcement trend
The report adds that Illinois is not the only jurisdiction taking a harder line on crypto taxation. The U.S. Internal Revenue Service has also been tightening digital asset tax reporting rules and requiring exchanges to provide more detailed tax data.
If the lawsuit succeeds, the report says it could set a precedent for crypto tax policy in other U.S. states.