Crypto · updated 1h ago · 2 min read
Illinois Agrees to Delay 0.2% Crypto Tax Until July 1, 2027 Pending Judge Approval
Illinois delays 0.2% digital asset tax to July 1, 2027, pending judge approval. Enforcement remains paused during litigation by Digital Chamber and Illinois Blockchain Association.
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Illinois tax delayed
Illinois agreed to postpone implementing a 0.2% tax on crypto transactions, with the start date shifting from Jan. 1 to July 1, 2027, if a judge approves the deal.
The Digital Chamber and the Illinois Blockchain Association negotiated the delay with state officials, and the agreement was described as a way to let the state and industry focus on a legal dispute over Illinois' Digital Asset Tax Act.
Illinois' law was signed by Governor JB Pritzker in June as part of the state's fiscal 2027 budget, and it would require crypto brokers to impose the 0.2% levy or face potential prison time and fines.
The Digital Chamber argued the provision was introduced by being inserted into the budget without sufficient debate or public input, and the parties said pushing the start date back would allow the court to hear and decide key legal issues without disadvantaging the parties' rights, claims or defences.
The Digital Chamber framed the pause as relief from compliance obligations while it continued to seek to have the tax permanently repealed through the courts, even as the judge's approval remained required.
Court fight continues
The Digital Chamber filed a lawsuit in July against Illinois Attorney General Kwame Raoul and David Harris, a tax authority official, and the dispute centered on Illinois' "Digital Asset Tax". The Crypto Council for Innovation and the Blockchain Association also filed a separate lawsuit in August, and they sought a preliminary injunction to block implementation in January 2027. Cointelegraph reported that as of Thursday the status of the CCI and BA lawsuit was unclear given the agreement for a six-month delay.
The joint court motion described the arrangement as a request for court relief rather than a final judgment on whether the tax is lawful, and it asked the court to preliminarily enjoin the tax and stay its effective date until July. The agreed timetable would postpone enforcement while the legal challenge continues, leaving the broader question of constitutionality and enforceability unresolved.
Who pays and what next
Illinois' Digital Asset Tax Act was described as imposing a 0.2% levy on covered digital asset activity involving brokers, including buying, selling, and moving coins between wallets. The tax was also described as applying to firms with more than $100,000 in receipts, and it was said to cover crypto transactions and accepting digital assets for storage rather than taxing holders based on the value of what they own. The Digital Chamber CEO Cody Carbone said the delay gave businesses and users "relief from costly compliance obligations" while the organization continued to seek to overturn the tax in court.
The Crypto Council for Innovation described the measure as the "most punitive digital asset tax" in the country, and it warned it could lead digital asset companies and entrepreneurs to move to other states. Illinois' next step depended on the judge's approval, and the parties' focus was expected to shift to the "disputed issues of law regarding the constitutionality and enforceability" of the state's Digital Asset Tax Act.