Digital Chamber Sues Illinois Over Nation's First Blockchain-Specific Transaction Tax
A leading industry group, The Digital Chamber, is taking legal action against a state tax law that singles out blockchain-based assets for special treatment. The lawsuit challenges the Digital Asset Tax Act in Illinois, which imposes a 0.2% levy on exchanges, transfers, and storage of digital assets. The group alleges that the tax does not place equivalent burdens on economically identical activities involving cash, stocks, or bonds. It further contends that the tax applies repeatedly to routine operations and reaches transactions with insufficient ties to the state via broad presumptions. The Act taxes mere custody and treats each exchange, transfer, and storage as a separate taxable occurrence. The plaintiffs are seeking declaratory and injunctive relief, asserting violations of Illinois and U.S. constitutional provisions on equal protection, commerce, and federal internet tax rules. The members of The Digital Chamber include digital asset exchanges, custodians, financial institutions, payment companies, stablecoin issuers, tokenization platforms, and blockchain infrastructure providers.