Illinois Delays Controversial Crypto Tax Amid Industry Lawsuit

By Decrypt Staff

Illinois crypto users just got a six-month reprieve, if a judge signs off.

State officials have agreed to push back the start of Illinois' Digital Asset Tax from Jan. 1 to July 1, 2027, according to a joint motion filed Thursday in Sangamon County Circuit Court. The filing asks the court to preliminarily enjoin the tax, or temporarily block it, and stay its effective date until July.

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The motion stems from a lawsuit brought by the Chamber of Digital Commerce, known as The Digital Chamber, and the Illinois Blockchain Association against Illinois Department of Revenue Director David Harris and Attorney General Kwame Raoul.

Because the motion is agreed, or "stipulated," both sides are asking the judge for the same outcome, but the court must still approve it.

The Digital Chamber announced the deal on X and credited its attorneys at Bellementis PLLC. The delay doesn't settle the case, and the industry groups are still challenging whether the tax is constitutional and enforceable.

Gov. JB Pritzker signed the Digital Asset Tax Act in June as part of the state's 2027 budget. The law imposes a 0.2% levy on crypto activity in the state, including purchases and transfers, to be collected by digital asset brokers such as major exchanges. The Crypto Council for Innovation called it the "most punitive digital asset tax" in the country. Lawmakers estimated it could raise as much as $60 million in 2027.

Critics have zeroed in on how broadly the levy applies. The Digital Chamber has argued the tax hits users whether or not they realize any gain.

The Blockchain Association and the Crypto Council for Innovation are pursuing their own challenge. On Sept. 9, they asked the same court to block the tax, arguing that firms were already spending millions of dollars to build compliance systems without meaningful guidance from the state.

Meanwhile, in Washington, the House Ways and Means Committee advanced the Digital Asset Tax Certainty Act last month. Among other changes, the bill would eliminate gain-or-loss calculations on qualifying network fees of $10 or less, starting in 2028.

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