Illinois officials have joined crypto industry groups in asking a court to postpone the start of the state’s new digital-asset tax, shifting the proposed effective date from Jan. 1 to July 1, 2027.
The agreed motion was filed on Oct. 1 in Sangamon County as part of a constitutional challenge brought by The Digital Chamber and the Illinois Blockchain Association. According to CryptoSlate, Illinois Revenue Director David Harris and Attorney General Kwame Raoul signed onto the request, although the state continues to reject the industry groups’ arguments against the law.
The filing does not concede that the tax is unconstitutional, and it does not seek to repeal the measure. Instead, the two sides are asking for a temporary pause while the lawsuit and the Illinois Department of Revenue’s rulemaking process continue. As of Oct. 4, the court had not been confirmed to have entered the requested order.
What the Illinois tax would cover
Illinois enacted the Digital Asset Tax in June. The measure imposes a 0.2% levy on the value of digital assets involved in certain covered transactions. Unlike a tax based on an investor’s trading gain or profit, this levy is tied to the value of the assets covered by the transaction.
That distinction is central to the dispute because the amount potentially subject to the levy would not be determined by whether a customer made money. The tax instead focuses on the value of qualifying digital-asset activity under the law and the rules being developed to implement it.
Preliminary rules from the Illinois Department of Revenue indicate that the scope could include some transfers from a broker to a customer’s self-custody wallet when the statutory conditions are satisfied. A direct transfer that does not involve a covered broker may fall outside the levy. The final treatment of particular transactions remains connected to the department’s ongoing rulemaking.
A broker would generally be responsible for collecting and remitting the tax. If a broker failed to collect it, however, the customer could face a fallback obligation to calculate and pay the amount independently by the 20th day of the following month.
Why the requested delay matters
The tax was scheduled to begin in January, even as the legal challenge remained unresolved. If the judge approves the agreed motion, brokers would receive an additional six months before collection duties begin, and covered customers would not face the corresponding immediate payment deadlines during the first half of 2027.
The proposed injunction would also defer the liabilities associated with the collection system for covered customers. For exchanges, brokers and other affected firms, that could provide more time to develop the systems needed to identify covered transactions, calculate the levy, collect it and report the relevant information.
The filing represents a change in the short-term posture of the dispute. Crypto companies and industry groups have spent months warning that the tax could increase compliance costs and encourage activity to move outside Illinois. The state’s participation in the request addresses the timing of enforcement, but it does not mean Illinois has accepted the constitutional challenge.
The underlying lawsuit would continue if the delay is granted. The levy would remain on the books, and the court would still need to address the industry groups’ challenge to its validity.
Rulemaking and market picture
The Revenue Department is still seeking public input on preliminary rules. Comments are due by close of business on Oct. 30. The rules have not yet been filed with the Illinois Secretary of State or submitted to the Joint Committee on Administrative Rules, so important implementation details remain unsettled.
The parties have also asked to move the state’s deadline for responding to the lawsuit to Nov. 13. That leaves two major near-term questions: whether the court enters the requested injunction and how the Revenue Department revises its rules after reviewing public comments.
Moneyiar market data at 09:48-09:49 on Oct. 5, 2026, showed mixed performance among the listed digital assets:
- Monad (MON) traded at $0.0323430455, down 4.47% over 24 hours but up 17.35% over seven days.
- Decimal (DEL) stood at $0.3867056947, falling 3.95% in 24 hours and 12.84% over seven days.
- RedStone (RED) was priced at $0.1720966834, down 2.43% over 24 hours and up 7.57% over seven days.
- Ontology (ONT) traded at $0.0604161945, up 1.11% over 24 hours and 8.29% over seven days.
If approved, the requested delay would give the industry another six months before customers begin encountering the tax on covered transactions. It would not resolve the constitutional case, determine the final rules or guarantee that the levy will ultimately take effect.
