Illinois and crypto industry groups ask court to delay 0.2% digital asset tax to July 2027

Illinois is asking a court to delay its own crypto tax. The state’s revenue director and attorney general have joined the Digital Chamber and the Illinois Blockchain Association in an agreed motion to push the 0.2% Digital Asset Tax Act from Jan. 1 to July 1, 2027.

The motion was filed Oct. 1 in Sangamon County Circuit Court. As of Oct. 4, the court had not entered an order, so the Jan. 1 start date still stands.

How Illinois’ Crypto tax rule would work

The controversy centers on Illinois’ Digital Asset Tax Act, enacted in June. Under the legislation, a 0.2% tax applies to the value of digital assets connected to certain covered digital-asset business activities.

The structure is particularly important for crypto investors because the levy is based on the value of the digital asset involved in a covered transaction rather than simply on an investor’s trading profit.

Illinois law places collection responsibilities on digital-asset brokers providing qualifying services to customers in the state.

The legislation defines digital-asset business activity broadly, including activities involving the exchange, transfer or storage of digital assets. The law also provides for brokers to collect the tax from customers and remit it to the Illinois Department of Revenue.

Crypto tax rule keeps compliance pressure on brokers

Although the requested delay could give exchanges and other digital-asset businesses more time, it does not eliminate the compliance challenge surrounding the Crypto tax rule.

Illinois’ Department of Revenue has already published draft proposed regulations and is accepting public comments through October 30.

The agency has confirmed that the draft rules have not yet been filed with the Secretary of State or submitted to the Joint Committee on Administrative Rules.

Businesses may need to establish systems capable of identifying covered transactions, calculating the applicable amount and collecting the levy from customers.

The legislation also places responsibility on brokers for taxes that should have been collected. That creates a potential compliance risk for businesses operating in Illinois, particularly if transaction classifications are unclear.

Crypto tax rule battle continues in court

The legal dispute remains the central issue despite the proposed implementation delay. The Digital Chamber and Illinois Blockchain Association have challenged the measure, while state officials continue to dispute the claims against it.

The requested six-month pause would allow both sides to preserve their respective legal positions while the court considers the underlying issues. It would also give Illinois additional time to complete its regulatory process.

The parties have separately sought to move the state’s deadline for responding to the lawsuit to November 13, adding more time to the legal proceedings.

A lengthy dispute could influence how digital-asset businesses evaluate Illinois as a place to operate, particularly if companies anticipate higher compliance costs or uncertainty surrounding transaction taxation.

The Crypto tax rule therefore remains a significant regulatory issue for exchanges, brokers and investors with connections to Illinois.

The law remains on the books, and lawmakers have separately seen legislation introduced that would repeal the Digital Asset Tax Act. That repeal proposal, however, is a separate legislative process and does not itself invalidate the existing law.

Until the court rules on the requested postponement and Illinois finalizes its regulations, the Crypto tax rule remains an unresolved issue for the state’s digital-asset sector.

The key developments to monitor are the court’s decision on the proposed delay, the outcome of the constitutional challenge and the final version of Illinois’ implementing regulations.

The Crypto tax rule could still change in practical effect as those proceedings develop, making regulatory updates particularly important for businesses and individuals conducting covered digital-asset activities in the state.