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a16z, Uniswap and a crowd of crypto firms tell an Illinois court the state's 0.2% crypto tax can't work
Summary
A group of crypto companies and advocacy groups filed an amicus brief Thursday backing the industry's legal challenge to Illinois' Digital Asset Tax Act, according to CoinDesk and The Block.
The law imposes a 0.2% tax on digital asset transactions; it was set to take effect in January 2027 but has been postponed to July 2027 while the challenge plays out, the outlets reported.
The brief argues the law is too vague, discriminates against the crypto industry and would sweep in non-custodial software developers who have no customers to collect tax from and no access to users' assets or locations, CoinDesk reported.
The DeFi Education Fund, Paradigm, Uniswap and Andreessen Horowitz led the filing, per The Block; CoinDesk counts 18 signers, while The Block lists a longer set of names including Aave Labs, Chainlink Labs, Phantom and Stand With Crypto.
Updates
- Update, : Decrypt reports the DOJ, the U.S. Chamber of Commerce and SIFMA also filed briefs backing the challenge.
- Update, : Cointelegraph also reports on the filings.
Key facts
- The brief says 'an estimated 2.64 million Illinoisans hold digital assets, the fifth-highest total of any state,' The Block reported.
- The underlying lawsuit was brought by the Blockchain Association, the Crypto Council for Innovation and The Digital Chamber after Gov. JB Pritzker signed the law as part of fiscal 2027 budget planning, The Block reported.
- CoinDesk: the tax applies to firms exceeding $100,000 in receipts and was estimated to raise as much as $60 million for the state.
- The brief says developers of non-custodial software 'keep no accounts or customer records and have no technological ability to collect or store them,' CoinDesk reported.
- Decrypt: the DOJ, the U.S. Chamber of Commerce, SIFMA and a crypto coalition led by a16z, Paradigm and Uniswap filed briefs backing the lawsuit to strike down the state's 0.2% levy on digital asset transactions.
- Cointelegraph: the groups argued in court filings that the tax, which applies even when a transaction yields no profit, could raise compliance costs and violate federal law.