In the United States of America, a 0.2 per cent tax on digital asset activities is facing new judicial challenges. The Block Chain Association and the Encryption Innovation Commission filed a lawsuit on 21 August, requesting the court to prevent the tax from coming into force on 1 January 2027.

The plaintiff listed the director of the Illinois State Tax Office, the state Attorney General and the district prosecutor of Sangamon as defendants. The indictment was submitted to the Seventh Judicial Circuit Court of Sangamón County. Two industry organizations requested the court to issue preliminary and permanent injunctions and found the digital asset tax law invalid.

Tax coverage covers transactions, transfers and trusteeship

According to the law of the State of Illinois, the tax is calculated at 0.2 per cent of the value of digital assets and applies to specific exchange, transfer and storage services. This applies to institutions that provide related services to clients in Illinois.

One of the points at issue is that the tax is not based on the customer ' s profit or the broker ' s fees, but is directly based on the value of the asset. According to the plaintiff, even transfers between wallets controlled by the same customer could have been included in the tax even if there had been no sale.

The prosecution documents also mention that brokers are required to complete their registration by 1 January 2027 and begin their representation, with the first payment expected in February 2027. In the plaintiff's view, it was not clear from some of the provisions of the Act that “operated in the state”, and that it was difficult for an enterprise to judge whether it was required to fulfil its registration and representation obligations.

The plaintiff claimed that the bill had several legal issues.

In their pleadings, the two organizations submitted seven claims that the tax was contrary to the United States Internet Freedom of Taxation Act, as it imposed taxes on online digital asset activities that differed from comparable transactions such as stocks, cash or gold.

It also invoked commercial provisions in the United States Constitution, due process protection and the requirement of uniformity in the Illinois Constitution. The plaintiff argued that the Act lacked a clear definition of key concepts such as valuation, storage and presence, and that there might be inconsistencies or inequities in implementation.

In addition, the plaintiff challenged the legislative procedure of the bill, arguing that it had been incorporated into a 1624-page budget case, which might involve a dispute over the State Council ' s procedural claims. These elements, however, are still the original version of the claim and are not the findings of the Court. The Illinois side has yet to respond publicly to this new lawsuit.

The second suit increased pre-execution pressure.

This is the second industrial action against the Illinois Digital Asset Tax. The Digital Chamber of Commerce has filed another case on 21 July, in which it also considered that the tax was inappropriate for block chain transactions rather than for comparable traditional financial activities.

At present, the plaintiffs in both cases are not the same and no public documents show that they were joined by the court. The date of the hearing or the written response schedule have not yet been disclosed in the public material of the new proceedings.

It needs to be noted that prosecutions themselves do not automatically suspend law enforcement. If the injunction is not granted by the courts and the State Council does not repeal the law, the enterprises concerned will still have to prepare for the effective date of January 2027.

Illinois previously estimated that this tax could generate approximately $6 million in revenue per year. However, this figure is still a budget calculation and will ultimately be achieved depending on progress in litigation and changes in legislation.

State Council still has a path to abolition.

In addition to a court injunction, there is a path to the direct withdrawal of the tax by the State Council. The Republican State Congressman John Cabello proposed HB 5798 on 22 June to immediately repeal the Digital Assets Tax Act.

However, public records indicate that the bill is still at the stage of its introduction and has not yet been put to a vote in the Committee or submitted to a plenary vote. In the case of enterprises, there are three main possible outcomes by 2027: a court injunction, a state council's repeal or a law that continues as planned.