Illinois state officials have agreed to postpone the implementation of the state’s 0.2% Digital Asset Tax, delaying its start date by six months to July 1, 2027. The move follows a joint motion filed in Sangamon County Circuit Court by government representatives and two industry advocacy groups, pending judicial approval.
Tax delay tied to ongoing lawsuit
The postponement is the result of a lawsuit brought by the Chamber of Digital Commerce, also known as The Digital Chamber, and the Illinois Blockchain Association. The groups are challenging the constitutionality of the tax and have named Illinois Department of Revenue Director David Harris and Attorney General Kwame Raoul as defendants.
The court filing requests a preliminary injunction to block the tax’s enforcement until July 2027, allowing more time for the legal process to play out. The parties reached a stipulated agreement, meaning both sides are making a unified request for the court to approve the delay; however, a judge must still sign off before it takes effect.
The Digital Chamber, a Washington-based trade group that represents digital asset and blockchain companies, announced the agreement on X in collaboration with Illinois Blockchain Association. Attorneys from Bellementis PLLC have been representing the groups in court.
The joint motion seeks to temporarily halt the tax, providing Illinois crypto users and businesses with a six-month extension before the levy is enforced.
The agreement does not resolve the wider dispute over the law’s validity, and the industry organizations continue to seek a finding that the tax is unconstitutional.
Details of Illinois’ Digital Asset Tax Act
Governor JB Pritzker signed the Digital Asset Tax Act in June as part of Illinois’ 2027 budget. The law establishes a 0.2% levy on digital asset activities conducted within the state, including crypto purchases and transfers. The tax is designed to be collected by digital asset brokers, such as major cryptocurrency exchanges.
Lawmakers have estimated that the measure could generate up to $60 million in revenue in 2027. The Crypto Council for Innovation, an industry coalition focused on crypto policy, described the legislation as the most punitive digital asset tax in the United States.
Critics have argued that the levy’s broad application means users are taxed on transactions regardless of whether they realize gains.
| Tax Measure | Illinois Digital Asset Tax |
|---|---|
| Tax Rate | 0.2% |
| Scope | Crypto purchases, transfers |
| Collection | By digital asset brokers/exchanges |
| Estimated Revenue (2027) | $60 million |
| Start Date | July 1, 2027 (pending court approval) |
Additional challenges and federal developments
The Blockchain Association and the Crypto Council for Innovation are also mounting a separate legal challenge against the Illinois tax. On September 9, these groups asked the Sangamon County court to block the levy. Their argument cites mounting compliance costs for digital asset firms, which they claim are forced to prepare new systems without clear regulatory guidance.
Compliance efforts by these firms have reportedly required investments of millions of dollars to meet anticipated regulatory obligations.
In related federal news, the US House Ways and Means Committee advanced the Digital Asset Tax Certainty Act last month in Washington. Among its provisions, the bill would remove the need to calculate gains or losses on certain network fees of $10 or less, starting in 2028, aiming to simplify tax compliance for crypto transactions.
Mini dictionary: Chamber of Digital Commerce, an industry organization in Washington that advocates for the digital asset and blockchain industry on regulatory and legal matters.
