A crypto lobby organization has sued the state of Illinois over a last-minute tax provision inserted into the state budget last month.
TDC (also known as The Digital Chamber) argued that Illinois’ Digital Asset Tax Act violated both the United States and state constitutions and is exempt from federal tax law. The lawsuit, filed Tuesday, asks a federal judge to block the state of Illinois from enforcing the tax.
The tax violates the Uniformity and Due Process Clauses of the Illinois State Constitution, the Commerce Clause of the U.S. Constitution and the Internet Tax Freedom Act by specifying transactions involving digital assets, the suit said.
The Digital Asset Tax Act was passed and approved on short notice last month, just before the state of Illinois ended its session for the year. The 0.2% tax applies to all entities based in Illinois or providing services with gross receipts in excess of $100,000. The tax comes into force in January.
TDC’s lawsuit said the Internet Tax Freedom Act alone created a rule that “electronic commerce would not be subject to discriminatory state and local taxation.”
