Crypto Firms Back Challenge to Illinois Tax

Andreessen Horowitz and DeFi Education Fund file amicus brief against the state's digital asset transaction tax.

Updated on Nov. 12, 2026 in Taxes

Crypto Firms Back Challenge to Illinois Tax

Live Poll

Do you support Illinois taxing digital asset transactions at 0.2%?

The DeFi Education Fund and Andreessen Horowitz filed an amicus brief backing the crypto industry's lawsuit challenging Illinois' Digital Asset Tax Act. The brief argues the Act singles out blockchain transactions for unfavorable tax treatment and lacks clear boundaries between taxable business activity and software and network infrastructure.

Why it matters

The 0.2% tax applies to digital asset transactions, and an estimated 2.64 million Illinoisans hold digital assets, the fifth-highest number of any state. The outcome of the challenge could determine how digital asset activity is taxed across Illinois.

The Digital Asset Tax Act imposes a 0.2% tax on digital asset transactions, affecting an estimated 2.64 million Illinoisans, the fifth-highest total of any state. The court's ruling on the lawsuit has not yet been issued, leaving the law's final treatment unresolved.

The players

Andreessen Horowitz

Andreessen Horowitz is a Silicon Valley venture capital firm that has invested heavily in cryptocurrency and blockchain companies.

JB Pritzker

JB Pritzker is the Governor of Illinois, a Democrat who has led the state since 2019 and signed the Digital Asset Tax Act.

The details

Andreessen Horowitz, Paradigm, Uniswap and the DeFi Education Fund led entities that signed the amicus brief, filed Thursday in support of the Blockchain Association, the Crypto Council for Innovation and The Digital Chamber, which sued Illinois over the law. Governor JB Pritzker signed the Act as part of the state's fiscal year 2027 budget planning.

January 2027: The Digital Asset Tax Act was originally scheduled to take effect.
July 2027: The Act's effective date was postponed to this month.
November 12, 2026: The amicus brief challenging the tax was filed.

Market Dynamics

The Illinois Digital Asset Tax Act is the central focus of the industry's challenge, with the amicus brief contesting its 0.2% transaction tax as applied to blockchain activity. The lawsuit places the Act's treatment of digital assets at the center of a broader legal test of state-level crypto taxation.

Illinois residents holding digital assets could face a 0.2% tax on transactions once the law takes effect in July 2027. The pending lawsuit could change that obligation before the effective date.

The takeaway

Holders of digital assets in Illinois should track the pending lawsuit and the July 2027 effective date, since the outcome may change transaction tax obligations.