Illinois Officials Join Industry Bid to Delay Digital Asset Tax to July 2027

Illinois officials joined crypto industry groups in a joint motion filed Oct. 1 asking a Sangamon County court to push the start of the state's 0.2% Digital Asset Tax from Jan. 1 to July 1, 2027. Revenue Director David Harris and Attorney General Kwame Raoul signed onto the request alongside The Digital Chamber and the Illinois Blockchain Association, even as the state continues to dispute the legal challenge against the levy, according to CryptoSlate's Oct. 5 report. The court had not confirmed entry of the order as of Oct. 4, so the delay remains a request rather than a settled outcome.

The motion asks the judge to block collection temporarily and shift the effective date by six months while the lawsuit moves forward. CoinDesk reported on Sept. 30 that both sides favor the pause, which would let them skip a fight over interim injunctions and turn to the disputed questions over whether the tax is constitutional and enforceable. Because the filing is stipulated, both camps seek the same near-term result, but only the judge can grant it, Decrypt noted in its Oct. 1 account.

The levy sits at the center of a months-long dispute. Lawmakers enacted the Digital Asset Tax in June as part of the state's 2027 budget, setting a 0.2% charge on the value of covered digital-asset transactions rather than on trading gains, CryptoSlate said in its summary of the law. The distinction counts because a customer moving assets can owe the charge whether or not the transaction produced any profit.

Firms with more than $100,000 in receipts fall within the law's reach, including exchanges and other brokers that handle storage or transaction activity. Lawmakers estimated the measure could bring in up to $60 million in 2027, Decrypt reported in its Oct. 1 piece. That estimate assumed collection would begin in January, a timetable the joint motion now seeks to move.

Collection duties sit first with brokers, which must collect and remit the tax and can remain liable when they fail to do so. Customers carry a fallback duty of their own. When the tax goes uncollected, the customer may have to calculate and pay it directly by the 20th of the following month, as described in the draft framework. A fee-paid withdrawal from a broker to a self-custody wallet can qualify as a covered transaction when the statutory conditions are met, while a direct transfer without a covered broker may fall outside the charge.

The Digital Chamber and the Illinois Blockchain Association brought the constitutional challenge now before the court, naming Harris and Raoul as defendants. Their suit contests the tax under state law and argues it conflicts with federal limits, including the Internet Tax Freedom Act, CoinDesk said in its Sept. 30 report. The groups had earlier sought a temporary stop on Sept. 9, telling the court that companies were already spending heavily to prepare for January without clear guidance.

A second case adds pressure from another direction. The Blockchain Association and the Crypto Council for Innovation are pursuing a separate challenge in the same court, and on Sept. 9 they asked for the tax to be blocked while arguing that firms faced large compliance bills before workable rules existed, an Oct. 1 article explains. That proceeding continues on its own track regardless of how the judge rules on the joint delay request.

Rulemaking remains unfinished. The Illinois Department of Revenue has circulated draft rules for consultation, with public comments open through close of business Oct. 30. The drafts have not been filed with the Secretary of State or sent to the Joint Committee on Administrative Rules, which leaves central implementation details unsettled, according to an Oct. 5 write-up. The parties have also asked to move the state's deadline for answering the Chamber suit to Nov. 13.

Digital Chamber chief executive Cody Carbone welcomed the agreed pause in a statement quoted by CoinDesk, saying it would spare businesses and users near-term compliance costs while the groups keep pressing courts to throw the tax out for good. The joint filing itself concedes nothing about constitutionality and asks only for time.

What changes in practice depends on the judge. If the court enters the order, brokers would avoid collecting the levy through the first half of 2027, and covered customers would see no corresponding charge on in-scope transactions during that window. The legal challenge would carry on in the meantime, leaving open an outcome in which companies spend the reprieve building collection systems for a tax whose validity a court has yet to decide, as one Oct. 5 analysis observed.

If the judge declines, the January start date stands, and firms must be ready to collect, remit, and report within weeks of the new year. Either way, the comment period closing Oct. 30 gives affected businesses a near-term venue to shape the rules before the department finalizes them, as noted in that Oct. 1 report. The department has not given a date for final rules.