Illinois will postpone the start of a 0.2% tax on digital assets for six months after crypto industry groups challenged the measure in court and argued that it had been added to the state budget without sufficient legislative debate or public input. The tax, originally scheduled to take effect on Jan. 1, 2027, will now be delayed until July 1, 2027, according to a Thursday court filing.
Court agreement pushes back implementation
The agreement was reported in a filing before the Circuit Court of Sangamon County by Digital Chamber, a crypto and blockchain advocacy organization that is suing Illinois Attorney General Kwame Raoul and Illinois Department of Revenue official David Harris.
The parties said the delay would allow the court to consider the underlying legal issues in an orderly way. The filing stated that moving the effective date would permit “orderly briefing and adjudication” without affecting either side’s rights, claims or defenses in the case.
Digital Chamber brought its lawsuit in July. The group claims the tax was inserted into Illinois’ budget legislation without adequate debate or an opportunity for public feedback. The tax was included in a Senate bill forming part of the state’s fiscal 2027 budget, which Governor JB Pritzker signed into law in June.
What the tax would require
Under the legislation, crypto brokers would be required to collect a 0.2% tax on digital assets. The law also provides for possible fines and prison time beginning when the tax takes effect, according to the source material.
The measure therefore affects intermediaries rather than simply establishing a tax obligation for individual crypto holders. In general terms, crypto brokers are businesses that facilitate transactions in digital assets, while digital assets can include cryptocurrencies and other blockchain-based tokens.
Digital Chamber Chief Executive Cody Carbone described the six-month postponement as a significant victory for the industry, while stressing that the legal challenge remains active. “A delay is not a repeal,” Carbone said, adding that the organization would continue seeking to have the tax overturned.
Other industry groups have challenged the measure
The Digital Chamber case is separate from lawsuits filed in August by the Crypto Council for Innovation and the Blockchain Association. Those organizations have challenged the tax on constitutional grounds and later sought a preliminary injunction to prevent its planned Jan. 1 implementation.
The status of that separate case was unclear after the agreement to delay the tax. Cointelegraph said it contacted the two groups for comment but had not received an immediate response.
The postponement does not resolve whether Illinois’ digital asset tax is lawful. It changes the timetable while the court proceedings continue, leaving the tax’s eventual implementation dependent on the outcome of the legal disputes.
Current market picture
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