Illinois has agreed to postpone its newly enacted 0.2% digital asset tax by six months, pushing its scheduled Jan. 1 start date to July 1, under an agreement struck between state officials and crypto industry representatives — though the deal still requires a judge's approval.

The accord was negotiated by The Digital Chamber, a Washington-based blockchain advocacy organization, and the Illinois Blockchain Association, which have combined efforts to oppose the measure. The Digital Chamber confirmed the agreement to CoinDesk. According to the groups, the delay is intended to let the legal arguments over the tax play out in court without the levy looming over businesses in the meantime.

Illinois approved the tax in June, imposing a 0.2% levy on crypto activity involving firms that exceed $100,000 in receipts — a threshold that captures all transaction activity as well as accepting digital assets for storage. The measure, which took the industry by surprise when it was introduced earlier this year, has drawn complaints from companies bracing for its compliance burden.

Under the agreement, a joint request for the delay is expected to be filed Thursday morning in the state circuit court in Sangamon County. If the court signs off, the two sides can set aside the fight over preliminary injunctions — interim orders that would have blocked the tax while the case proceeds — and move directly to the next stage of the litigation: the "disputed issues of law regarding the constitutionality and enforceability" of the state's Digital Asset Tax Act. A judge's approval of that request is the last step needed for the delay to take effect.

Crypto advocacy groups had previously asked a state court on Sept. 9 to grant a temporary halt to the tax, arguing that companies were already absorbing significant costs to prepare for its implementation.

"We're pleased that the State of Illinois has agreed to delay implementation of its Digital Asset Tax, giving digital asset businesses and users relief from costly compliance obligations while we continue to seek to have this tax permanently repealed through the courts," Digital Chamber CEO Cody Carbone said in a statement.

The industry has disputed the tax's validity under state law and argued that it is unconstitutional. Crypto organizations further contend that the levy is preempted by the federal Internet Tax Freedom Act, a 1998 law that bars state and local governments from imposing multiple or discriminatory taxes on electronic commerce.

The joint filing, which was reviewed by CoinDesk, argues that both parties are seeking the postponement "in the interest of justice while the matter works towards resolution on the merits."