Illinois has agreed to postpone its 0.2% tax on digital asset activity for six months, potentially moving the implementation date from Jan. 1 to July 1, pending approval from a state judge.
The proposed delay was negotiated by the Digital Chamber and Illinois Blockchain Association with state officials, the Digital Chamber told CoinDesk. The agreement would temporarily remove the immediate implementation deadline while the crypto industry continues its broader legal challenge against the tax.
The tax was approved by Illinois lawmakers in June under the state’s Digital Asset Tax Act. It imposes a 0.2% levy on crypto-related activity conducted by businesses that receive more than $100,000 in receipts. The measure covers transactions as well as activities involving the acceptance of digital assets for custody.
Joint Request Heads to State Court
The parties are expected to file a joint motion Thursday morning in Sangamon County state circuit court seeking approval of the six-month postponement.
If granted, the agreement would allow the state and the industry groups to move past the immediate dispute over preliminary injunctions and concentrate on the underlying legal case. That case involves questions concerning the “constitutionality and enforceability” of Illinois’ Digital Asset Tax Act.
The industry groups had previously sought emergency relief from the court. On Sept. 9, crypto advocacy organizations asked for a temporary suspension of the tax, citing the compliance costs companies were already facing as they prepared for the measure to take effect.
Crypto Groups Continue to Oppose Tax
The Digital Chamber and other crypto organizations have argued that the tax is invalid under Illinois law and unconstitutional. They have also claimed that federal law, specifically the Internet Tax Freedom Act, preempts the state measure.
Digital Chamber CEO Cody Carbone said the agreement would provide relief from the compliance burden while the industry continues pursuing its challenge.
“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businesses and users relief from costly compliance obligations while we continue to seek to have this tax permanently repealed through the courts,” Carbone said in a statement.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 filing reviewed by CoinDesk states that the delay is being requested by both sides “in the interest of justice while the matter works towards resolution on the merits.”
If approved, the agreement would postpone implementation but would not settle the industry’s constitutional and federal-law challenges. Those issues would remain before the court as the case proceeds.
