Illinois Delays Its 0.2% Crypto Tax by Six Months Pending Court Review

Illinois has agreed to delay its 0.2% tax on digital asset activity by six months. The new start date, July 1, 2027 instead of January 1, comes from a joint motion filed on October 1 in Sangamon County Circuit Court. The deal takes effect only if a judge approves it.

What the parties agreed

According to CoinDesk, the Digital Chamber and the Illinois Blockchain Association negotiated the arrangement with state officials. Both sides ask the court to stay the law until July so the legal questions can be argued without a deadline looming. Decrypt clarifies that the motion is joint, so both sides ask for the same outcome, but the final say stays with the court.

The Digital Chamber sued Illinois Attorney General Kwame Raoul and Department of Revenue Director David Harris in July. The suit says the tax was "slipped into the state's budget" without debate or public feedback, Cointelegraph reported.

Governor JB Pritzker signed the Digital Asset Tax Act in June as part of the fiscal 2027 budget.

How the tax was meant to work

The 0.2% levy applies to purchases and transfers of digital assets. Brokers, for example large crypto exchanges, were to collect it. CoinDesk reports the rule covers firms with more than $100,000 in receipts and all kinds of activity, including accepting assets for storage. Brokers who failed to collect faced fines and even prison time, Cointelegraph wrote.

The Crypto Council for Innovation called it the most punitive digital asset tax in the country. The Digital Chamber stresses another point: users would pay whether or not they made a gain.

That means even an ordinary purchase of Bitcoin in the state would fall under the levy. Critics name this breadth as the main problem.

What the industry says

Digital Chamber CEO Cody Carbone called the delay a major win but reminded readers it is not a repeal.

"A delay is not a repeal. The job isn't done, and we won't stop until this tax is struck down for good."

- Cody Carbone, CEO of the Digital Chamber, from a statement after the delay agreement

The industry's position rests on several grounds. Market participants say the tax is invalid under state law and unconstitutional. A further ground is the federal Internet Tax Freedom Act, which in their view overrides the state rule.

Parallel suits and Washington

The Blockchain Association and the Crypto Council for Innovation filed a separate challenge. On September 9 they asked the same court to block the levy, saying firms were already spending millions of dollars on compliance systems without meaningful guidance from the state. After the new agreement the status of that suit is unclear, and neither group answered Cointelegraph's request right away.

At the federal level, the House Ways and Means Committee advanced the Digital Asset Tax Certainty Act last month. Among other changes, the bill would eliminate gain-or-loss calculations on network fees of $10 or less starting in 2028.

For taxpayers, this means six months of breathing room. Whether the tax survives until July 2027 is up to the court.