Trade groups seek to block Illinois crypto tax before January effective date
The Crypto Council for Innovation and the Blockchain Association asked an Illinois court on Sept. 9, 2026, for a preliminary injunction blocking enforcement of the states 0.2% cryptocurrency transaction tax before it takes effect on Jan. 1, 2027. The trade groups argue the levy is unconstitutional, conflicts with federal and state law, and is already forcing companies to spend heavily on compliance under threat of penalties.
Why It Matters
The groups say the tax would impose immediate, costly compliance burdens and raise unresolved legal questions about what transactions are taxable, risks that could prompt other states to adopt similar measures if the law is upheld. The litigation therefore has implications for how digital asset activity will be taxed and regulated across the U.S.
Key Facts
- Tax rate: 0.2%
- Effective date challenged: Jan. 1, 2027
- Plaintiffs: Crypto Council for Innovation (CCI) and Blockchain Association (BA)
- Court where motion filed: Circuit Court of Sangamon County, Illinois
- Date of motion: Filed Sept. 9, 2026 (reported Wednesday)
Two industry trade groups have moved to block Illinois from enforcing a 0.2% tax on cryptocurrency transactions ahead of its Jan. 1, 2027 start date. On Sept. 9, 2026, the Crypto Council for Innovation and the Blockchain Association filed a motion for a preliminary injunction in the Circuit Court of Sangamon County, asking the court to prevent the state from collecting the levy while litigation proceeds.
The plaintiffs contend the tax, enacted as part of Illinoiss fiscal 2027 budget and labeled a "privilege tax," is unconstitutional and conflicts with both federal and state law, including claims under the U.S. Constitution, the Illinois Constitution, due process provisions, and the federal Internet Tax Freedom Act. They say the statute's approach taxing transaction volume rather than income creates uncertainty about which activities are covered and exposes firms to potential criminal penalties.
CCI CEO Ji Hun Kim said companies are already allocating millions of dollars to build compliance systems to meet the Jan. 1 deadline, diverting resources amid unresolved legal questions. Blockchain Association CEO Summer Mersinger warned that Illinoiss move could encourage other states to pursue similar taxes if the law is allowed to stand, while the state would gain little by enforcing it immediately.
The new injunction filing follows a broader lawsuit the two groups filed last month challenging the law's legality. Other industry actors have pursued parallel challenges: the Digital Chamber filed a similar suit shortly before, and prediction-market operator Kalshi has separately sued state officials over a law effective July 1 that bans certain sports-event contracts. Governor J.B. Pritzker also issued an executive order in April barring state employees from betting on such platforms to reduce risks of insider trading.
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