Breaking: Digital Chamber Sues Illinois To Challenge New Crypto Tax Law

The Digital Chamber has sued the State of Illinois over the new Digital Asset Tax Act that it passed. The industry group has requested a court in Sangamon County to halt the law before it goes into effect Jan. 1, 2027. It became the first crypto coalition to take such a step and is now inviting other stakeholders to join the fray.

Digital Chamber Files Lawsuit Against Illinois Over Crypto Tax

The case is the first trade association to go to court against the Illinois law. The organization contends that the tax is unfair because digital asset activities are taxed differently from similar activities in traditional financial systems.

The crypto tax law will impose taxes on certain types of digital asset business activity at a rate of 0.2%, according to recent filings. Thus, the complaint alleges the measure discriminates based on the technology employed to record and/or transfer ownership.

🧵1/ Today we filed suit in Sangamon County, IL, to stop the Digital Asset Tax Act. No one should be taxed differently because of how ownership of digital assets is recorded or transferred. pic.twitter.com/pv3J3FPybM

— The Digital Chamber (@DigitalChamber) July 21, 2026

As per the Digital Chamber, the new tax would be unfair on businesses in the crypto industry. It said the members are already spending money to prepare themselves for compliance even though the law is set to come into force only from January 2027.

It also said that the measure goes beyond crypto transactions. The provision is in effect even if an investor makes a profit or transfers ownership, Digital Chamber stated. The group said the language may also impact technology-related transactions like artificial intelligence and cloud computing applications.

CEO Slams ‘Unfair Tax’ System

Cody Carbone, CEO of The Digital Chamber, said, “Today we are asking the courts to protect consumers and our members and stop this unfair tax in Illinois. Taxes should be carefully considered, not only for the revenue they produce but for the fairness of those being taxed. That was not the case here, as the provision slipped into legislation the night before the bill’s final consideration.”

The suit also alleges that people shouldn’t be taxed differently just because of how they record or transfer ownership. It contends that the Illinois law is a disadvantaged discrimination against persons transacting in digital assets.

Additional groups can join the legal challenge as the case progresses through court procedures, the Digital Chamber said.

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