Trade Associations Ask Illinois Court to Block Digital Asset Tax

The Crypto Council for Innovation ("CCI") and the Blockchain Association ("BA") filed a motion for a preliminary injunction in the Circuit Court of Sangamon County, Illinois, asking the court to bar the state from enforcing its Digital Asset Tax Act (see prior coverage) before the law takes effect on January 1, 2027.

The two trade associations first challenged the tax in a joint lawsuit filed in August 2026. The new motion asks the court to halt collection of the tax before its effective date, arguing that digital asset firms face irreparable harm from having to build compliance systems on an expedited timeline without clear guidance on what transactions are taxed, all while facing criminal penalties for noncompliance.

According to the motion, companies are also likely to lose customers who shift activity to digital assets not subject to the tax once it takes effect, a harm the associations argued a later court ruling could not reverse. CCI CEO Ji Hun Kim said companies are being forced to divert resources to comply with what he called a tax that violates constitutional rights, and asked the court to preserve the status quo rather than let the tax operate before its legality is resolved.

BA CEO Summer Mersinger said the Act singles out digital commerce and exposes companies and ordinary Illinoisans to severe penalties, including felony liability for companies, for misinterpreting an indeterminate statute. Ms. Mersinger noted the state projects for fiscal year 2027 about $60 million in revenue from the tax against more than $224 billion in total appropriations, and argued that under the state's Protest Monies Act, Illinois likely could not spend the disputed funds during the litigation regardless of the outcome.