The crypto tax Illinois sprang on the industry earlier this year may not kick in on January 1 after all. The state has agreed to push it back six months, according to the industry groups that negotiated the delay.
There’s a catch. A judge still has to sign off.
The Digital Chamber and the Illinois Blockchain Association reached the deal with state officials, the Chamber said. The two groups have joined forces to oppose the Illinois plan, and the delay could ease some of the pressure while they keep trying to get rid of the tax entirely.
What the tax actually charges
In June, Illinois’ government approved a 0.2% tax on crypto activity involving firms that exceed $100,000 in receipts. That covers all transaction activities and accepting assets for storage.
A 0.2% rate sounds small on paper. But the industry’s complaint has been about what it costs to get ready for it. Companies were already absorbing compliance costs to brace for the tax, the groups said when they asked a state court on Sept. 9 for a temporary stop.
The filing lands Thursday
The joint request for a delay is expected to be filed Thursday morning in the state circuit court in Sangamon County. The filing will argue that both parties want the delay “in the interest of justice while the matter works towards resolution on the merits.”
If the judge approves it, both sides can stop fighting over legal injunctions. They’d move straight to the next stage of the dispute: 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
Nobody on the crypto side is treating six months as a win in itself. Cody Carbone, CEO of the Digital Chamber, framed it as 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businesses and users relief from costly compliance obligations while we continue to seek to have this tax permanently repealed through the courts,” Carbone said in a statement.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 attack runs on three tracks. The industry disputes the tax’s validity under state law. It argues the tax is unconstitutional. And crypto organizations contend it’s preempted by federal law under the Internet Tax Freedom Act.
What this means if you run a crypto business in Illinois
If the delay gets approved, the January 1 start date is off the table and the earliest the tax could take effect moves back six months. That’s time the court can spend on whether the law holds up at all.
Until the judge rules on Thursday’s filing, though, nothing is final. If your firm clears $100,000 in receipts, keep your compliance plans on the shelf rather than in the trash.
