Illinois and two cryptocurrency industry groups have jointly asked a state court to delay the state's 0.2% crypto tax by six months. The proposed change would move enforcement from January 1 to July 1, 2027, while the legal challenge against the levy continues.

An agreed motion was filed in Sangamon County Circuit Court on October 1. It asks the judge to enter a preliminary injunction, and court approval is still required before the new effective date can take effect.

JUST IN: 🇺🇸 Illinois agrees to delay its new crypto transaction tax by6 months.
• Tax on certain transactions, regardless of profit or loss
• Originally planned for January 2027
• Challenged by the crypto industry in court
• Delay still awaiting approval from a judge pic.twitter.com/fwYfQdHb51

— CryptoTweets (@CryptoTweets) October 1, 2026

Six-Month Pause Would Keep Case Moving

Digital Chamber and the Illinois Blockchain Association sided with state officials in the request for the pause. The filing cannot resolve the dispute over the legality of the crypto tax, and each side will continue to pursue its respective arguments.

Under Illinois law, the tax is imposed at a rate of 0.2% of the value associated with digital asset business activity. It covers qualifying services, including digital asset exchange, transfer, and storage, under the statute enacted by the Illinois General Assembly. The levy applies to certain transactions regardless of whether they produce a profit or a loss.

Digital asset brokers must impose the tax under the statutory requirement and will also be required to register with the Illinois Department of Revenue. The effective date for the crypto tax is set as January 1, 2027, unless the court grants relief on the request. For covered firms, approval of the motion would push the start of those registration and collection duties to July 1 — the added runway industry plaintiffs sought when they argued in September that the January deadline amounted to an accelerated compliance timeline.

Industry representatives have opposed the measure as violating the constitution and being inconsistent with federal law. The Blockchain Association and Crypto Council for Innovation moved for a preliminary injunction in September. According to their filing, firms are already incurring substantial costs in developing compliance frameworks, and they argued that the January deadline is an accelerated compliance timeline. The industry representatives contended that those costs constitute irreparable harm. Illinois denies the allegations made against the crypto tax.

The Digital Chamber filed the lawsuit challenging the tax in July. Plaintiffs claim the Act is unconstitutional under the Illinois and federal constitutions and preempted by the Internet Tax Freedom Act. State officials deny these claims, while the current motion concerns only a change to the timeline.

What the Draft Rules Cover

The Illinois Department of Revenue issued draft regulations on September 28, and the public comment period remains open until October 30. The agency states that the draft has not yet been filed with the Secretary of State or the Joint Committee on Administrative Rules.

The regulations provide additional guidance on the operation of the crypto tax. Stablecoins are considered digital assets, while non-fungible tokens that qualify under the law are exempted. Certain fee-based transactions using customer wallets may also be covered by the proposed regulation.

Decentralized finance transactions are handled separately in the draft. Payments for protocol fees associated with covered activity will constitute a taxable transaction, while payments for network fees made to miners and validators are not deemed qualifying consideration.

Certain out-of-state businesses are also subject to the state rules. The draft regulation defines a remote digital asset broker as a business with gross receipts from Illinois customers in excess of $100,000.

Because the draft remains in its comment phase, affected businesses can submit feedback on these and other provisions during the open window before the agency advances the rules through the state's rulemaking process.

How Federal Digital Asset Policy Differs

Separately, legislation pertaining to digital asset taxes continues to advance in Congress. On September 16, the House Ways and Means Committee passed H.R. 10357, titled the Digital Asset Tax Certainty Act, by a vote of 38–5. The bill was ordered reported to the House floor but has not yet become law.

Unlike the Illinois crypto tax, H.R. 10357 addresses federal tax treatment of fees for services rendered, mining, staking, lending, and reporting by brokers. Those provisions have no relation to Illinois' 0.2% crypto tax, which concerns the activity of covered digital asset businesses within the state.

Another cryptocurrency-related bill was considered at the Senate stage in September. The motion to proceed to consideration of the CLARITY Act failed on a vote of 49–50 on September 15. That bill deals with digital asset market structure, not Illinois tax policy.

Even if enacted, none of these federal measures would alter the state obligations at the center of the Illinois case, leaving the Sangamon County ruling on the agreed motion and the October 30 close of the comment period as the next dates to watch.

For now, the matter rests with the Sangamon County court, which will decide the crypto tax case. If the agreed motion is approved, enforcement of the crypto tax in Illinois will be postponed until July 1, 2027. In the absence of such a court decision or other legislative measures, January 1 remains the effective date for the statute. The agreed motion preserves each party's rights and defenses and therefore will not settle the underlying question of law.