Illinois delays crypto tax by six months pending court ruling

Illinois crypto businesses have won a reprieve from a new 0.2% digital asset tax, with state officials agreeing to push the start date back six months while a court fight over the levy’s legality continues. The deal, still pending judicial approval, buys the industry time without resolving the underlying dispute over whether the tax is constitutional.

• Illinois agreed to delay its 0.2% crypto tax by six months, moving the start date from January 1 to July 1.
• The Digital Chamber and Illinois Blockchain Association negotiated the delay with state officials, with a joint filing expected Thursday (October 1) in Sangamon County circuit court.
• The tax targets crypto firms with more than $100,000 in receipts, covering transaction activity and custody of digital assets.

• 0.2% tax rate imposed on qualifying digital asset activity in Illinois
• $100,000 annual receipts threshold that triggers tax liability for firms
• 6 months delay pushing the tax’s start date from January 1 to July 1
• Sept 9 date advocacy groups first sought a court stay on the tax

Illinois lawmakers approved the Digital Asset Tax Act in June, setting a 0.2% levy on crypto firms whose receipts exceed $100,000, with the tax reaching all transaction activity and any business that accepts digital assets for storage. The measure was due to take effect January 1, but according to reporting by CoinDesk, the state has now agreed to push that date to July 1, a six-month postponement negotiated directly with industry representatives.

The Digital Chamber and the Illinois Blockchain Association struck the accord with state officials, the Digital Chamber told CoinDesk. The agreement still requires sign-off from a judge in Sangamon County, where the two sides expect to file a joint request Thursday morning (October 1).

Joint filing in Sangamon County expected Thursday morning

The filing will ask the court to approve the six-month delay so litigation can proceed without an imminent compliance deadline. If granted, both sides can bypass a separate fight over emergency injunctions.

Instead, the case moves directly to what the filing describes as the “disputed issues of law regarding the constitutionality and enforceability” of the Digital Asset Tax Act. Crypto industry groups had already asked the state court on September 9 for a temporary stop to the tax, citing compliance costs that businesses were incurring ahead of the original January 1 deadline.

Cody Carbone says delay offers ‘relief’ while repeal fight continues

Digital Chamber CEO Cody Carbone framed the delay as a stopgap rather than a resolution, saying the organization will keep pressing for the tax’s permanent repeal in court.

We’re pleased that the State of Illinois has agreed to delay implementation of its Digital Asset Tax, giving digital asset businesses and users relief from costly compliance obligations while we continue to seek to have this tax permanently repealed through the courts.

Cody Carbone, CEO, Digital Chamber

Industry groups argue the tax is invalid under Illinois law and unconstitutional. They also contend it is preempted by the federal Internet Tax Freedom Act, a claim state officials have not addressed in the reporting reviewed by CoinDesk.

Delay filing argues both sides want resolution ‘on the merits’

The filing reviewed by CoinDesk states that Illinois and the industry groups are seeking the delay “in the interest of justice while the matter works towards resolution on the merits.” That language signals both parties expect the case to proceed to a substantive ruling rather than settle informally.

State officials have not issued a separate public statement on the agreement beyond the joint filing, and their position on the constitutionality and preemption arguments is not represented in the reporting. The Digital Asset Tax Act remains on the books even with the delay, meaning the July 1 date would take effect automatically if the court fight does not produce a ruling or settlement beforehand.

The BlockWest read. For crypto firms operating in Illinois, the six-month window is really a compliance budget, not a legal win. Businesses still need to build the systems to track receipts and transaction activity in case the tax survives the constitutional challenge, so treasury and legal teams should treat July 1 as the real deadline rather than assume repeal.

The joint request for delay is expected to be filed Thursday morning (October 1) in Sangamon County circuit court, where a judge must approve the postponement before it takes effect. The core question, whether Illinois’ 0.2% tax is constitutional and enforceable under state and federal law, remains unresolved and will be the focus of the next phase of litigation.

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