Nov 12, 2026, 11:45 a.m. EST
2 min read
Summary
- The crypto industry’s latest court brief argues that Illinois’ pending crypto tax fails in several areas, including being discriminatory, inappropriately vague and effectively impossible for certain targeted entities to meet.
- A group of 18 digital assets companies and organizations filed the brief in Illinois court as the matter continues to face legal dispute and has been postponed for at least six months.
Illinois sought to boost its revenue with a sudden grab at the assets changing hands in crypto transactions, catching the industry off guard in June. Now the whole crypto party, from a16z to Uniswap and many names in between, seems to have arrived in opposition, outlining in court why the state’s hopes for a cash influx are misplaced.
A brief filed Thursday by 18 crypto businesses and organizations seeks to explain that the planned tax — currently on hold while the legal challenges are disputed in court — doesn’t properly account for a complex crypto ecosystem in which the concept of “digital asset business activity” isn’t as easy to pin down as the state might like. Illinois wants to implement a 0.2% tax on crypto activity involving firms exceeding $100,000 in receipts, and recently agreed to a six-month delay from the Jan. 1 implementation.
The latest brief, which was also signed by Aave Labs, Chainlink Labs, Paradigm, Phantom Technologies, Stand With Crypto and the DeFi Education Fund, says the tax law’s definitions leave them baffled as to who should be treated as a crypto broker and what activity falls into the taxable range. They argue it’s too vague to be legally permissible and discriminates against the digital assets industry.
The Illinois Department of Revenue would be “sweeping in developers, providers and other network participants who would not be able to collect a tax from customers they do not have, direct payments from assets they do not control or determine a transaction’s location from information they do not have,” according to the brief.
The industry argues that the tax seems to include “people who write software that others use to transact for themselves,” and those developers don’t have traditional customers nor any reach into or knowledge of the users’ assets.
“Under the agency’s erroneous interpretation, developers and providers that lack custody of user assets, customer account relationships or access to customer-location information could face obligations they have no practical ability to perform,” the industry argued in the document known as an amicus brief in which entities affected by a court case can weigh in. “Unlike a traditional broker, who is a person responsible for carrying out transfers of digital assets on another’s behalf, developers and providers of non-custodial software keep no accounts or customer records and have no technological ability to collect or store them.”
Originally published at https://www.coindesk.com/policy/2026/11/12/illinois-crypto-tax-is-impossible-to-enforce-as-written-crypto-industry-tells-court.
