The Crypto Council for Innovation (CCI) and the Blockchain Association filed a motion for preliminary injunction Wednesday in the Circuit Court of Sangamon County, Illinois, asking the court to halt enforcement of the state's 0.2% cryptocurrency transaction tax before it takes effect Jan. 1, 2027.
The two trade groups have been challenging the measure since last month, when they filed a lawsuit arguing the tax violates the U.S. Constitution, the state constitution, federal and state due process provisions, and the federal Internet Tax Freedom Act. The Digital Chamber filed a similar suit days earlier, according to the groups.
Illinois Governor JB Pritzker signed the legislation into law in June as part of the state's fiscal year 2027 budget. The measure imposes a "privilege tax" calculated on transaction volume rather than income, making Illinois the first state in the nation to single out cryptocurrency transactions for taxation.
"Companies are being asked to spend millions to build systems for a tax that violates their constitutional rights without answers to basic questions about what is taxed and when, all under the threat of criminal penalties," said Ji Hun Kim, CCI CEO, in a statement. "These costs are being borne right now, against a Jan. 1 deadline, forcing companies to divert key resources and employees to a clearly unlawful tax."
The groups argue that the tax threatens irreparable harm to digital asset firms and is prompting costly compliance preparations under constitutional uncertainty.
"The state loses very little by waiting. Everyone else loses a great deal by forging ahead. And if this Act stands, Illinois will not be the last state to try it," said Summer Mersinger, CEO of the Blockchain Association.
In a separate development, Illinois is also targeting prediction market platforms. Kalshi has filed a lawsuit against state officials over a July 1 law that "expressly bans sports event contracts," which the company says violates federal law by requiring state licensing. Pritzker previously signed an executive order in April banning state employees from betting on such platforms, citing concerns over insider trading amid rapid growth in online prediction markets and event-based gambling contracts.
