The Blockchain Association and the Crypto Council for Innovation have filed a lawsuit against Illinois’ new Digital Asset Tax Act, arguing that the state exceeded its constitutional authority by creating a tax specifically targeting digital assets. The lawsuit claims the law violates the Dormant Commerce Clause, which prevents states from establishing discriminatory tax regimes against interstate commerce, as well as the federal Internet Tax Freedom Act. The plaintiffs also argue that the law does not apply to equivalent traditional assets, creating unfair competitive distortion. The procedure for adopting the law is also challenged: it reportedly moved through the legislative process in just a few hours without sufficient debate or opportunity for public input.
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