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Andreessen Horowitz, the DeFi Education Fund, Paradigm and Uniswap led a broad coalition of crypto firms filing an amicus brief on Thursday backing the industry's legal challenge to Illinois' Digital Asset Tax Act. The brief argues the law is overly broad and unfairly targets the digital asset industry, noting that an estimated 2.64 million Illinois residents hold digital assets, the fifth-highest total of any state.
"The Act singles out transactions involving blockchain technology for unfavorable tax treatment and affects a substantial number of Illinois residents," the group said. The signatories also include Aave Labs, Aptos Labs, Aztec Labs, Chainlink Labs, the Decentralization Research Center, Figment Inc., the Hyperliquid Policy Center, Jito Labs, Multicoin Capital Management, Orca Creative, Phantom Technologies, the Solana Policy Institute and Stand With Crypto.
Why it matters
The filing deepens a legal battle that began after Governor JB Pritzker signed the Digital Asset Tax Act into law as part of Illinois' fiscal year 2027 budget planning. The law imposes a 0.2% tax on digital asset transactions and was originally set to take effect in January 2027, but has since been postponed to July 2027. The Blockchain Association, the Crypto Council for Innovation and The Digital Chamber have already sued the state over the measure.
The coalition's core argument goes beyond the tax rate. It contends the law fails to draw clear boundaries between taxable digital asset business activity and the software and network infrastructure that lets users transact independently, and does not account for the technological complexities of digital assets.
Market impact
Industry advocates have described the Illinois measure as unprecedented in US state-level crypto taxation, and the coordinated response from a16z, Paradigm, Uniswap and more than a dozen other firms signals the sector is prepared to litigate rather than absorb it. A court victory for the challengers would set a precedent on whether states can single out blockchain transactions for distinct tax treatment.
Frequently asked questions
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What does Illinois' Digital Asset Tax Act impose?
The law imposes a 0.2% tax on digital asset transactions. It was signed by Governor JB Pritzker as part of the state's fiscal year 2027 budget planning and was initially scheduled to take effect in January 2027 before being postponed to July 2027.
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Who filed the amicus brief against the Illinois crypto tax?
The DeFi Education Fund, Paradigm, Uniswap and Andreessen Horowitz led the entities that signed the brief. Other signatories include Aave Labs, Aptos Labs, Aztec Labs, Chainlink Labs, Jito Labs, Multicoin Capital and the Solana Policy Institute.
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What is the main legal argument in the amicus brief?
The group argues the law is overly broad and fails to establish clear boundaries between taxable digital asset business activity and the software and network infrastructure that enables users to transact independently.
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Who has sued Illinois over the Digital Asset Tax Act?
The Blockchain Association, the Crypto Council for Innovation and The Digital Chamber have sued Illinois after Governor JB Pritzker signed the law, and the amicus brief backs that industry challenge.
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How many Illinois residents hold digital assets?
An estimated 2.64 million Illinoisans hold digital assets, the fifth-highest total of any US state, according to the amicus brief.
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