A coalition of 18 crypto companies and industry groups has urged an Illinois court to reject the state’s planned tax on digital-asset transactions, arguing the measure is discriminatory, too vague and unworkable for many of the entities it could reach.

The filing, submitted as an amicus brief, says Illinois regulators are interpreting the law so broadly that it could cover software developers, service providers and other network participants that do not hold user funds, maintain customer accounts or know where a transaction takes place.

Broad industry opposition takes shape

The latest court filing adds a wide range of crypto firms and advocacy organizations to the challenge against the Illinois tax. Signatories include a16z, Uniswap, Aave Labs, Chainlink Labs, Paradigm, Phantom Technologies, Stand With Crypto and the DeFi Education Fund.

According to the brief, the state’s attempt to raise revenue through a new levy on crypto activity caught the industry off guard when it emerged in June. The dispute has continued in court since then, and the matter has now been delayed for at least six months.

Core argument: the law is too vague

The groups argue that the statute and the state’s interpretation do not clearly define who should count as a crypto broker or which activities fall within the taxable category. In their view, that uncertainty is serious enough to make the measure legally impermissible.

The brief also claims the tax unfairly singles out the digital-asset sector. The challengers say the result is a framework that treats crypto activity differently while failing to give affected parties clear notice of what conduct triggers tax obligations.

Non-custodial actors say compliance is impossible

A central point in the filing is that Illinois is allegedly trying to impose collection duties on parties that are structurally unable to perform them. The brief says the Department of Revenue’s approach would sweep in developers, providers and other participants that have no customers from whom they can collect a tax, no control over the assets involved and no information that would let them determine where a transaction occurred.

The filing specifically points to people who create software that others use to transact on their own. Those developers, the industry groups argue, are not comparable to traditional intermediaries because they do not take custody of user assets, keep customer accounts or maintain the records needed to identify users and locations.

What the court fight is testing

The amicus brief does not resolve the case, but it expands the record against Illinois’s proposal by laying out how the tax could apply to entities that operate non-custodial tools rather than customer-facing brokerage services. The challengers say that under the state’s reading, such actors could be assigned duties they have no practical way to fulfill.

For now, the next confirmed development is procedural rather than substantive: the legal dispute remains active, and the implementation fight has been pushed back for at least six months while the court considers the arguments now being assembled around the tax.

Source: www.coindesk.com