Illinois grants six-month postponement of cryptocurrency tax amid ongoing legal challenges

Both parties agreed that the 0.2% tax should be delayed until July 1, contingent on court approval of the agreement, allowing the state and industry to concentrate on the legal dispute.

• The newly introduced 0.2% Illinois cryptocurrency tax that has raised concerns within the industry is set to be delayed by six months to July 1, provided a judge approves the deal between state officials and cryptocurrency industry representatives.
• The Digital Chamber and Illinois Blockchain Association negotiated a postponement to enable legal arguments to proceed in court without the tax pressure imminent.

The unexpected cryptocurrency tax imposed by Illinois earlier this year will not commence on January 1 after the state agreed to defer it for six months, according to the industry groups involved in negotiating the delay, which will still require judicial approval.

The Digital Chamber and Illinois Blockchain Association reached an agreement with state officials, the Chamber informed Decryptnews, and this could ease some pressure surrounding the impending tax as cryptocurrency interests continue efforts to eliminate the proposal. In June, Illinois’ government had sanctioned a 0.2% tax on cryptocurrency transactions involving companies generating over $100,000 in revenue — encompassing all transaction activities and asset storage services.

The joint request for a delay is expected to be filed Thursday morning in the state circuit court in Sangamon County. If approved, the parties can avoid disputes over legal injunctions and redirect their focus to the subsequent phase in the courtroom confrontation, the «disputed issues of law regarding the constitutionality and enforceability» of the state’s Digital Asset Tax Act.

Cryptocurrency advocacy groups — which have united efforts to oppose the Illinois proposal — had previously petitioned a state court on September 9 for a temporary halt as the industry expressed concerns over expenses companies were already incurring to prepare for the tax.

«We are pleased that the State of Illinois has agreed to delay implementation of its Digital Asset Tax, providing digital asset businesses and users relief from expensive compliance obligations while we continue pursuing permanent repeal of this tax through the courts,» said Digital Chamber CEO Cody Carbone in a statement.

The industry has challenged the legitimacy of the tax under state legislation and has argued it violates constitutional provisions. Additionally, cryptocurrency organizations claim it is preempted by federal law under the Internet Tax Freedom Act. The filing, reviewed by Decryptnews, will assert that both parties are seeking the delay «in the interest of justice while the matter advances toward resolution on the merits.»

As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.

Why it matters:

As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.