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The Crypto Council for Innovation (CCI) and Blockchain Association (BA) filed a lawsuit against Illinois officials regarding the state’s 0.2% tax on cryptocurrency, expected to be enforced starting in January 2027.&nbsp;
In a lawsuit filed Friday in the Circuit Court of the Seventh Judicial Circuit for Sangamon County, lawyers for the two crypto advocacy groups <a href="https://cryptoforinnovation.org/wp-content/uploads/2026/08/Illinois-Complaint-final.pdf" rel="noopener noreferrer nofollow">challenged</a> Illinois’ digital asset tax on the grounds it violated the US Constitution, the state’s constitution, federal and state due process laws and the federal Internet Tax Freedom Act. Illinois Governor JB Pritzker <a href="https://cointelegraph.com/news/crypto-advocates-execs-push-back-on-illinois-transaction-tax" rel="noopener noreferrer nofollow">signed the measure into law</a> as a “privilege tax” in June as part of the state’s fiscal year 2027 budget, requiring crypto users to be taxed as applied to transaction volume rather than income.
On the due process claim, CCI and BA argued that the tax was “unconstitutionally vague” by placing the burden on residents and brokers “under the threat of serious civil and criminal penalties” to determine what and how such assets were taxed. Notably, the crypto organizations’ arguments under the US Constitution were based on alleged violations of the <a href="https://www.law.cornell.edu/wex/commerce_clause" rel="noopener noreferrer nofollow">Commerce Clause</a> covering interstate commerce, claiming that the state tax “creat[ed] the specter of duplicative taxation.”
“States have an important role to play in fostering innovation, but that authority has constitutional limits,” said Summer Mersinger, CEO of the Blockchain Association and a former commissioner at the US Commodity Futures Trading Commission. “Illinois cannot impose a novel tax regime that discriminates against digital commerce, creates uncertainty for consumers and businesses, and threatens to fragment a rapidly growing national market.”<img alt="" height="700" src="https://s3-images.ctmedia.io/media/content/screenshot-2026-08-24-at-94344-am.png" width="784">
Source: <a href="https://x.com/BlockchainAssn/status/2090913543432351785" rel="noopener noreferrer nofollow">Blockchain Association</a>
The CCI and BA lawsuit followed a similar one <a href="https://cointelegraph.com/news/digital-chamber-lawsuit-illinois-crypto-tax" rel="noopener noreferrer nofollow">filed by the Digital Chamber</a> in July in which that organization argued that the Illinois tax “discriminates against people who transact in digital assets.“ The suits represented the influence of digital asset groups in opposition to laws passed by US state officials during an election year when crypto policy, laws and regulation could influence voters.
Related: <a href="https://cointelegraph.com/news/nigeria-crypto-tax-rules-digital-asset-platforms" rel="noopener noreferrer nofollow">Nigeria sets crypto tax collection rules for digital asset platforms</a>
<h2 id="illinois-also-targeting-prediction-markets">Illinois also targeting prediction markets</h2>
Opposition to the crypto tax came amid prediction market platform Kalshi’s <a href="https://cointelegraph.com/news/kalshi-lawsuit-illinois-prediction-markets" rel="noopener noreferrer nofollow">lawsuit against Illinois officials</a> over a law that went into effect on July 1. According to the company, the legislation “expressly bans sports event contracts” in violation of federal law by requiring state licensing.
Separately, Pritzker <a href="https://cointelegraph.com/news/ny-governor-signs-eo-on-prediction-markets-following-illinois" rel="noopener noreferrer nofollow">signed an executive order</a> banning state employees from betting on the platforms in April in an effort to ”prevent insider trading amid the rapid growth of online prediction markets and event-based gambling contracts.”
Magazine: <a href="https://cointelegraph.com/magazine/crypto-industry-ties-liability-illinois-primary" rel="noopener noreferrer nofollow">Crypto industry ties were a liability in Illinois primary</a>

Crypto advocacy groups oppose Illinois digital asset tax in court

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