The Crypto Council for Innovation and the Blockchain Association pushed forward with their legal battle against the new Illinois cryptocurrency levy, petitioning an Illinois state court on Wednesday to halt the measure prior to its implementation while the broader industry campaign to invalidate the tax moves through the legal system.
These two advocacy coalitions initially moved to block the legislation last month, joining The Digital Chamber in contending that federal statutes override the Digital Asset Tax Law passed earlier in the year. The 0.2 percent tax approved during the concluding day of the Illinois legislative session targets any businesses headquartered in Illinois or offering services within the state with gross receipts exceeding $100,000, and is scheduled to become active on January 1, 2027.
The submission presented on Wednesday requests the Sangamon County Circuit Court to grant a preliminary injunction, maintaining that member enterprises represented by the two associations are presently enduring substantial and unmitigated injury because they are forced to construct infrastructure to adhere to the mandate.
Via a public statement, CCI CEO Ji Hun Kim expressed that enterprises are currently compelled to expend millions in order to establish reporting mechanisms for a levy that breaches their constitutional protections, and this occurs while fundamental inquiries regarding taxation scopes and triggers remain unanswered.
Similarly, Blockchain Association CEO Summer Mersinger noted in an official remark that Illinois will be restricted from utilizing any revenue anticipated from the tax throughout the duration of the legal proceedings, meaning the state surrenders very little by pausing. Conversely, all other stakeholders stand to suffer substantial losses if the state presses forward.
A significant portion of the Wednesday document restates positions previously advanced by the digital asset sector, asserting that both the Internet Tax Freedom Act and the United States Constitution supersede the state-level levy on cryptocurrency transactions. Furthermore, the submission contends that the state discriminates against digital assets by regulating them differently than standard financial services.
The legal filing explains that Illinois generally refrains from taxing transactions or services involving financial assets, aside from levying income and capital gains taxes tied to those activities, and sales where financial assets such as currency serve as the payment instrument. Furthermore, the state sales and use tax framework does not extend to activities concerning intangible personal property, which encompasses the majority of financial assets, and those regulations explicitly exempt currency and precious metals.
Mersinger also cautioned that alternative jurisdictions may attempt to emulate Illinois should the state prevail in the litigation, warning that if the legislation survives, Illinois will not remain the sole state to adopt such a measure.
Originally published at https://www.coindesk.com/policy/2026/09/09/crypto-lobbying-orgs-ask-court-to-suspend-illinois-tax-as-legal-case-continues.
