Illinois Delays Digital-Asset Tax by Six Months After Crypto Industry Lawsuits

Illinois has agreed to delay implementation of its digital-asset tax by six months as lawsuits from the crypto industry continue. The tax, originally set to take effect in January 2027, will now be imposed starting in July 2027.

Cointelegraph reported on Oct. 1 that the Digital Chamber, a digital-asset and blockchain advocacy group, said in a filing with the Sangamon County Circuit Court that the state had agreed to move the effective date of a 0.2% tax on digital-asset transactions to July 1, 2027, from Jan. 1, 2027.

The tax provision was included in Illinois' fiscal 2027 budget signed by Governor JB Pritzker in June. It imposes a 0.2% tax on crypto brokers and allows fines or prison terms for violations.

The industry has objected to the measure since the legislative process. The Digital Chamber filed suit in July against Illinois Attorney General Kwame Raoul and David Harris, an official with the state Department of Revenue, arguing that the provision was added to the budget without sufficient public debate or input.

Digital Chamber Chief Executive Officer Cody Carbone called the delay a "major victory" for the crypto industry. He added that a delay is not a repeal and said the group would continue its legal challenge until the tax is fully invalidated.

Additional lawsuits are also pending. The Crypto Council for Innovation, or CCI, and the Blockchain Association, or BA, filed separate suits in August alleging the tax provision may be unconstitutional. They have also asked the court for a preliminary injunction to prevent the measure from taking effect in January 2027.

It remains unclear how the six-month delay agreement will affect those cases. While the start date for the tax has been pushed back, the legal fight over the measure itself is expected to continue.