Illinois Delays 0.2% Crypto Tax, Pending Judge Approval

Illinois has agreed to delay its 0.2% crypto tax until July 1, but the pause still depends on approval from a judge. The tax had been scheduled to start on January 1.

The measure applies to firms with more than $100,000 in receipts. It covers crypto transactions and accepting digital assets for storage, rather than taxing holders based on the value of what they own. Businesses would still have faced the cost of preparing to comply.

What the Six-Month Delay Covers

The Digital Chamber and the Illinois Blockchain Association negotiated the agreement with state officials. Their joint request was expected to be filed in the circuit court in Sangamon County.

The exact filing date and the judge's decision were not confirmed when the agreement was reported. Until a judge approves it, the January 1 start date remains on the table.

The filing says both sides want time to pursue the case “in the interest of justice while the matter works towards resolution on the merits.” That leaves the larger legal fight unresolved.

The Court Fight Is Not Over

Industry groups asked a state court on September 9 for a temporary stop. They argued that companies were already paying to prepare for a tax that later may never take effect. The result of that request was not confirmed.

The groups contend that the Digital Asset Tax Act is unconstitutional under state law. They also argue that the federal Internet Tax Freedom Act prevents Illinois from imposing the tax.

A six-month delay would let the parties focus on those constitutional and federal questions. It would not settle whether the law can be enforced, and it would not amount to the permanent repeal that the industry says it wants.

Digital Chamber CEO Cody Carbone said the agreement gives businesses and users “relief from costly compliance obligations” while the challenge continues in court.

For traders and holders, the practical effect is limited to a pause in enforcement preparations. The law reaches company activity, and the fight over its validity will continue after July 1 unless a court stops it.