Crypto groups launch legal battle against Illinois 0.2% digital asset tax

The 39-page complaint filed in Sangamon County Circuit Court targets Department of Revenue Director David Harris, Attorney General Kwame Raoul, and State’s Attorney John Milhiser. At the heart of the dispute is the Digital Asset Tax Act, which imposes a levy on the full value of assets whenever a broker exchanges, transfers, or stores them. Plaintiffs contend the law forces customers to pay taxes even on assets that have not been sold or yielded a profit, creating an inconsistent tax burden compared to traditional holdings like gold or stocks.

Legal experts representing the groups highlight six distinct constitutional violations, including breaches of the federal Internet Tax Freedom Act and the Commerce Clause. Because the law lacks a credit for taxes paid to other jurisdictions, firms fear that interstate transactions could face double taxation. Furthermore, the complaint alleges that the legislative process behind Public Act 104-468 was flawed, noting that the measure was inserted into a massive budget package with minimal public notice or debate. With brokers facing potential Class 3 felony charges for non-compliance, the industry is pushing for an injunction to block enforcement before the January 2027 start date.