The Crypto Council for Innovation (CCI) and Blockchain Association (BA) have filed a lawsuit against Illinois officials, challenging a new 0.2% tax on cryptocurrency transactions set to take effect in January 2027. The groups argue the tax, described as a “privilege tax” based on transaction volume rather than income, violates constitutional and legal principles, including claims of unconstitutional vagueness and duplication under the Commerce Clause.
The legislation, signed into law by Governor JB Pritzker in June as part of the fiscal year 2027 budget, has drawn criticism from crypto advocates who say it disproportionately burdens digital commerce. Summer Mersinger, CEO of the Blockchain Association, stated the tax creates “uncertainty for consumers and businesses” and risks fragmenting the national market.
This is not the first legal challenge to Illinois’ crypto policies. A similar suit was previously filed by the Digital Chamber, while Kalshi, a prediction market platform, separately sued over restrictions on sports event contracts under the state’s new prediction market law, which took effect on 1 July. Illinois also issued an executive order in April banning state employees from using prediction market platforms.
The lawsuit alleges the tax violates both federal and state constitutional provisions, though these claims remain untested in court. The enforcement date of January 2027 is expected but not yet confirmed. Legal experts will scrutinise whether the tax’s structure aligns with established precedents on state taxation and interstate commerce.
Written by Steven Cook
Regulation Desk
