Illinois Agrees to Delay Its 0.2% Crypto Tax by Six Months While Court Fight Continues

Illinois has agreed to push back its new 0.2% crypto tax by six months, to July 1, according to the industry groups that negotiated the deal. A judge still has to approve it, so the tax may not start on January 1 after all.

The Digital Chamber and the Illinois Blockchain Association worked out the accord with state officials. A joint request is expected Thursday morning in the state circuit court in Sangamon County.

How the Illinois Crypto Tax Works

The state approved the tax in June. It applies to crypto activity at firms with more than $100,000 in receipts, covering all transactions and the acceptance of assets for storage.

What the Delay Changes

If the court signs off, both sides can skip arguments over injunctions and move on to the main dispute over whether the Digital Asset Tax Act is constitutional and enforceable. Industry groups had asked a state court on September 9 for a temporary stop, citing the costs firms were already taking on to prepare.

Legal Challenge to the Digital Asset Tax Act

The industry argues the tax is invalid under state law and unconstitutional, and that it is preempted by the federal Internet Tax Freedom Act. Digital Chamber CEO Cody Carbone said the delay gives businesses and users relief from costly compliance while the groups keep seeking a permanent repeal through the courts.