Illinois’s new crypto tax, which caught the industry off guard earlier this year, may not start on January 1 as planned. According to the industry groups that negotiated with the state, officials have agreed to delay it by six months.
The delay is not final yet. A judge must still approve it.
The Digital Chamber says it reached the agreement with state officials alongside the Illinois Blockchain Association. The two organizations have teamed up against the Illinois plan. The pause would give them some relief while they keep pushing to have the tax scrapped altogether.
What the tax actually charges
Illinois’ government approved a 0.2% tax on crypto activity in June. It applies to firms with more than $100,000 in receipts and covers every kind of transaction activity as well as taking in assets for storage.
On paper, 0.2% looks like a modest rate. The industry’s main objection is the cost of preparing for it. When the groups asked a state court for a temporary halt on Sept. 9, they said companies were already paying compliance costs to get ready for the tax.
The filing lands Thursday
The joint request for the delay is expected to reach the state circuit court in Sangamon County on Thursday morning. It will argue that both parties are seeking the delay “in the interest of justice while the matter works towards resolution on the merits.”
If the judge signs off, the two sides can stop arguing over legal injunctions. They would go directly to the next stage of the case: the “disputed issues of law regarding the constitutionality and enforceability” of the state’s Digital Asset Tax Act.
The industry wants it gone, not just paused
The crypto side does not see six extra months as a victory on its own. Cody Carbone, CEO of the Digital Chamber, called the delay breathing room.
“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businesses and users relief from costly compliance obligations while we continue to seek to have this tax permanently repealed through the courts,” Carbone said in a statement.
The legal challenge makes three arguments. The industry says the tax is invalid under state law. It also says the tax is unconstitutional. And crypto organizations argue that federal law, through the Internet Tax Freedom Act, preempts it.
What this means if you run a crypto business in Illinois
If the court approves the delay, the January 1 start date no longer applies, and the tax could not take effect until six months later at the earliest. The court can use that time to decide whether the law stands at all.
Nothing is settled until the judge rules on Thursday’s filing. If your firm has more than $100,000 in receipts, put your compliance plans on hold, but don’t throw them out.
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