Justice Department Backs Illinois Digital Asset Tax Challenge

The U.S. Department of Justice is backing a legal challenge to Illinois’ Digital Asset Tax Act, adding federal support to a dispute over the state’s tax on digital assets.

The Digital Chamber and Illinois Blockchain Industry Association sued Illinois, arguing that the tax is unconstitutional. Illinois agreed to suspend the law’s effect and enforcement until July 1, 2027.

The lawsuit is part of a broader challenge involving two cases. The Blockchain Association, Crypto Council for Innovation, Digital Chamber and Illinois Blockchain Association, together with the state, proposed that a Sangamon County court rule by March 1, 2027. The proposed schedule requires court approval.