Illinois 0.2% Digital Asset Levy Draws Washington Fire Latest crypto news: the Illinois crypto tax now faces a rare united front. The U.S. Department of Justice, Wall Street groups, and a lar
Illinois 0.2% Digital Asset Levy Draws Washington Fire
Latest crypto news: the Illinois crypto tax now faces a rare united front. The U.S. Department of Justice, Wall Street groups, and a large industry coalition are all backing legal challenges to the 0.2% levy.
CryptosRus flagged the shift on X. The details below come from the statute and the official releases of the filing parties. The Blockchain Association, DeFi Education Fund, and SIFMA each posted their own notices.
The Digital Asset Tax Act is Article 3 of Public Act 104-0468. Governor J.B. Pritzker signed it on June 16, 2026, and the Illinois General Assembly hosts the full text.
The law imposes a 0.2% tax on the value of a digital asset involved in covered business activity. The activity includes exchanging, transferring, or storing the asset for an Illinois customer. The levy applies even when:
There is no sale
No profit is realized
Ownership does not change
Brokers with a physical presence or $100,000 in in-state digital asset receipts must register with the revenue department. They then collect and remit the levy. That puts exchanges and brokers at the center of compliance.
The Justice Department filed a statement of interest around November 6, 2026, targeting the Illinois crypto tax. It calls the levy vague and says it singles out digital assets in a way no other asset faces. It also says the law undermines federal policy.
The U.S. Chamber of Commerce and SIFMA filed an amicus brief the same week. They warn of heavy compliance work for banks, broker-dealers, and custodians. They also note that the charge can hit losses and internal transfers.
Both filings arrived days before the DeFi brief, so the court now holds three supporting briefs from very different camps.
An 18-member coalition filed its own amicus brief around November 11 and 12. Members include a16z, Paradigm, Uniswap Labs, Aave Labs, and Chainlink Labs. The DeFi Education Fund published the details.
The group argues that developers, interfaces, and validators often lack customer links, custody, or location data. Without them, collecting the levy is not workable for DeFi protocols. It also calls the law unfair to blockchain activity.
Source:Blockchain Association Official Press Release
The Blockchain Association and Crypto Council for Innovation, who filed a second suit, raise similar points under the state constitution and federal law. They ask the court to declare the act unlawful.
In October 2026, the state, the Digital Chamber, and the Illinois Blockchain Association jointly sought a preliminary injunction. The Sangamon County Circuit Court then stayed enforcement until July 1, 2027. The stay spares businesses immediate compliance work while the merits case proceeds.
The Act was due to start on January 1, 2027. The state had projected roughly $60 million in revenue for fiscal 2027, according to budget estimates cited in the legal filings.
Two consolidated suits name Revenue Director David Harris and Attorney General Kwame Raoul. The parties seek an expedited summary judgment ruling around early 2027, subject to court approval, per the Crypto Council for Innovation.
A repeal bill, HB 5798, has not advanced, and the draft rules open for comment do not settle the challenge. Any new crypto regulation update will follow the court's next step.
The Illinois crypto tax stays on the books but is frozen until mid-2027. Wall Street and DeFi rarely agree on regulation, yet both now say the state is taxing digital assets in ways traditional assets never face. For now, covered businesses face no enforcement. The coming ruling will decide what happens next.
Disclaimer: This article is for educational and informational purposes only and should not be considered financial or investment advice. Always conduct your own research before making investment decisions.
