The Digital Chamber Sues Illinois Over First-in-Nation 0.2% Digital Asset Transaction Tax

Jul 21, 2026

The Digital Chamber has filed a lawsuit in Illinois to block the state's new Digital Asset Tax Act, a first-of-its-kind 0.2% transaction levy set to take effect on January 1, 2027. Signed by Governor J.B. Pritzker as part of the FY2027 budget, the tax targets transaction value rather than profits and is projected to raise $60 million annually. The lawsuit argues the measure violates state and federal constitutions by unfairly discriminating against blockchain infrastructure.

Digital Chamber lawsuit filing

▪The Digital Chamber filed a lawsuit on July 21, 2026, in the Sangamon County Circuit Court to block Illinois' newly enacted Digital Asset Tax Act.
▪The Digital Chamber lawsuit names Illinois Department of Revenue Director David Harris and Attorney General Kwame Raoul as defendants.

Digital Asset Tax Act provisions

▪The Digital Asset Tax Act is projected by state officials to generate approximately $60 million in annual revenue.
▪The Digital Asset Tax Act imposes a 0.2% privilege tax on the value of covered digital asset transactions, including exchanges, transfers, or storage services.
▪The 0.2% tax applies to digital asset brokers based in Illinois or out-of-state brokers generating at least $100,000 in annual Illinois-related receipts.

Constitutional violations alleged

▪The Digital Chamber argues the law discriminates against blockchain infrastructure by taxing it differently than economically identical traditional financial rails.
▪The lawsuit alleges the tax violates the Commerce Clause of the United States Constitution and is preempted by the federal Internet Tax Freedom Act.
▪The Digital Chamber argues the Digital Asset Tax Act violates the Uniformity and Due Process clauses of the Illinois Constitution.

Wallet transfer tax concerns

▪The complaint uses a hypothetical resident named Steve Doe to illustrate how transactions could be presumed taxable in Illinois based on historical account registration.
▪The Digital Chamber warns that broad definitions in the law could trigger repeated, stacked taxes when users move assets between self-custody wallets.

FY2027 budget package origins

▪The Digital Chamber CEO Cody Carbone stated the tax provision was inserted into the budget legislation the night before final consideration, limiting public debate.
▪Governor J.B. Pritzker signed the Digital Asset Tax Act into law on June 16, 2026, as part of Illinois' $56 billion fiscal year 2027 budget package under Senate Bill 3019.

House Bill 5798 repeal effort

▪Illinois State Representative John Cabello introduced House Bill 5798 on June 22, 2026, to repeal the Digital Asset Tax Act in its entirety.
▪The proposed repeal under House Bill 5798 remains pending in the Illinois General Assembly as the court challenge proceeds.