The DeFi Education Fund and 17 other organizations, including Andreessen Horowitz and Uniswap Labs, asked an Illinois court on Nov. 11 for leave to file an amicus brief challenging the state’s Digital Asset Tax Act. The plaintiffs in the consolidated cases do not oppose this request, though no order granting it has appeared yet. Under Public Act 104-468, a broker that exchanges, transfers, or holds a digital asset for an Illinois customer must collect 0.2% of the asset’s value each time. This tax is set by statute to begin Jan. 1, 2027, although officials recently requested a delay to July 1, 2027, citing unclear status in related litigation. CFTC Chairman Michael Selig called the law effectively a "sin tax" on blockchain technology in a July op-ed.
Vagueness and Discrimination Arguments
The proposed brief centers on decentralized finance applications run by code on a blockchain, rather than companies holding customer funds. The groups argue the Act’s definitions are vague and overbroad, claiming developers "have no customers to collect from, no assets to remit from, and no way to know where a transaction occurred." They point to the Revenue Department’s Sept. 28 draft rules, which they say stretch "broker" to certain decentralized exchanges directly contrary to federal regulations. Federal rules exclude anyone solely validating transactions or providing non-custodial wallets where users hold their own keys. The brief asserts that reissuing rules would not help because the vagueness is baked into the statute itself.
The challengers also claim the tax discriminates against digital assets because Illinois does not tax identical activities involving stocks, bonds, or precious metals. They argue this breaks the Illinois Constitution’s Uniformity Clause and the federal Internet Tax Freedom Act. The defendants include Illinois Revenue Director David Harris, Attorney General Kwame Raoul, and Sangamon County State’s Attorney John Milhiser. Two industry lawsuits led by The Digital Chamber and the Blockchain Association currently challenge the law in Sangamon County circuit court. The groups ask the court to find the Act unlawful and unenforceable based on these constitutional violations.
