a16z Frontier, DeFi Education Fund and Uniswap Oppose Illinois Digital Asset Tax Bill and Related Rules

October 31: a16z Frontier, the DeFi Education Fund and Uniswap jointly submitted a comment letter opposing the Illinois Digital Asset Tax Bill. Miles Jennings, Policy Lead at a16z Frontier, said the bill is one of the most anti-innovation pieces of legislation in the United States, taxing transactions simply because they take a "digital" form. The proposed rulemaking has far exceeded statutory authority and would treat many DEXes as "brokers" required to collect taxes. He pointed out that autonomous software is not a "person" capable of collecting taxes and cannot comply; the move conflicts with the U.S. Treasury's classification of DEXes and with Illinois's own Digital Assets and Consumer Protection Act; the rules would even tax residents when no transaction occurs (akin to taxing a transfer from a checking account to a savings account). The letter calls on Illinois to stop politicizing the matter and to abide by existing law. In addition, the Crypto Council for Innovation (CCI) and the Blockchain Association are challenging the bill through litigation.