Illinois agrees to six-month delay of contested crypto tax pending court approval
Illinois agreed to postpone its 0.2% Digital Asset Tax from Jan. 1 to July 1, 2027, pending court approval, as industry groups press constitutional challenges.
Illinois has agreed to push back its 0.2% tax on digital asset activity by six months, from January 1 to July 1, 2027, as long as a judge signs off on the deal. The Digital Chamber announced the agreement in a post on X on October 1, after a lawsuit brought by the trade group and the Illinois Blockchain Association.
The delay is set out in a joint filing in Sangamon County Circuit Court, where both sides asked for the same outcome. Because the motion is stipulated, the state and the industry groups are not fighting over the timing, only over the tax itself. The filing cites the need to let the constitutional questions get a full hearing first.
“The Parties stipulate that continuing the Tax’s effective date from January 1, 2027 until July 1, 2027 will permit orderly briefing and adjudication of the underlying legal questions without prejudicing any Party’s rights, claims, or defenses on the merits,” the filing said.
What the tax would do
Gov. JB Pritzker signed the Digital Asset Tax Act in June 2026 as part of the state’s 2027 budget. It imposes a 0.2% levy on crypto activity by firms exceeding $100,000 in receipts, collected by digital asset brokers, and lawmakers estimated it could raise as much as $60 million in 2027. Under the legislation, brokers who failed to collect the tax faced potential prison time and fines starting January 1.
The Digital Chamber’s lawsuit, filed against Attorney General Kwame Raoul and Department of Revenue Director David Harris, argues the tax was slipped into the budget without debate or public feedback and hits users whether or not they realize any gain. The Blockchain Association and the Crypto Council for Innovation have filed a separate constitutional challenge to the tax; the two trade groups also sought to block its January 1 start, though the exact timing of that request is unclear from the court record. The industry argues the tax is unconstitutional, invalid under state law, and preempted by the federal Internet Tax Freedom Act.
A delay, not a decision
The agreement buys digital asset businesses six months of relief from compliance costs, but it settles nothing about whether the tax can stand. A judge could still rule the Digital Asset Tax Act unconstitutional, or let it take effect from July 1, 2027. The separate challenge from the Blockchain Association and the Crypto Council for Innovation also remains pending.
Digital Chamber CEO Cody Carbone called the agreement a win for digital asset businesses and users, while making clear the litigation continues. “A delay is not a repeal,” he said.
