Illinois Seeks Six-Month Delay for Crypto Tax Amid Industry Pushback

Illinois officials have agreed to a six-month delay in implementing the state’s new Digital Asset Tax, following months of pushback from crypto industry groups. The joint motion, filed on October 1 in Sangamon County, seeks to postpone the tax’s January 1, 2027, start date until July 1, 2027, while a constitutional challenge brought by The Digital Chamber and the Illinois Blockchain Association is resolved.

Revenue Director David Harris and Attorney General Kwame Raoul joined the request, even as the state disputes the industry’s claims against the law. If approved, the injunction would temporarily spare brokers from collecting the tax and defer corresponding liabilities for customers. The court had not confirmed the order as of October 4.

The Digital Asset Tax, enacted in June, imposes a 0.2% levy on the value of digital assets involved in certain covered transactions, rather than on investors’ trading profits. Draft rules from the Illinois Department of Revenue suggest the tax could apply broadly, including fee-paid withdrawals from brokers to self-custody wallets. Brokers are responsible for collecting and remitting the tax, while customers face a separate obligation to pay if the tax is not charged.

The delay, if granted, would give exchanges and other affected firms more time to build collection and reporting procedures. However, compliance work may still continue, as the draft rules remain under consultation with public comments open through October 30. The parties have also requested an extension for the state’s response to the lawsuit to November 13, leaving crypto companies with uncertainty until year-end.