Illinois officials and two crypto trade groups have jointly asked a Sangamon County judge to postpone the state's new digital-asset tax, pushing its start date from Jan. 1 to July 1, 2027. The agreed motion was filed Oct. 1 in the constitutional challenge brought by The Digital Chamber and the Illinois Blockchain Association.
Revenue Director David Harris and Attorney General Kwame Raoul signed onto the request while the state continues to defend the law. If the judge grants it, brokers would be temporarily spared from collecting the levy and covered customers would get a matching deferral on their own liabilities. As of Oct. 4, there was no confirmation the court had entered the order.
What the tax actually does
Illinois enacted the Digital Asset Tax in June. It's a 0.2% levy on the value of digital assets in certain covered transactions — not on an investor's trading profits. Brokers are on the hook for collecting and remitting it, and they can stay liable if they fail to collect. Customers aren't off the hook either: if the tax isn't charged, they may have to calculate and pay it themselves by the 20th of the following month.
Draft rules from the Illinois Department of Revenue suggest a fee-paid withdrawal from a broker to a self-custody wallet can qualify when the statutory conditions are met. A direct transfer without a covered broker may fall outside the levy entirely. Those rules are still under consultation, with public comments open through Oct. 30.
Nobody's dropping the lawsuit
The joint filing doesn't concede the law is unconstitutional, and it doesn't seek repeal. Both sides are preserving their legal positions while collection gets pushed back. That's a delay, not a settlement.
The state also asked to move its deadline for responding to the lawsuit to Nov. 13, according to the filing.
Exchanges get breathing room
A court-approved pause would remove the immediate deadline for the first half of 2027, giving exchanges and other affected firms more time to build collection and reporting procedures. But it wouldn't necessarily stop all compliance work. The draft rules remain unsettled: they haven't been filed with the Secretary of State or submitted to the Joint Committee on Administrative Rules, leaving key implementation details up in the air.
That matters because the obligations were set to begin in January despite the pending lawsuit — a deadline that has been hanging over brokers for months.
The next concrete checkpoint is Nov. 13, when the state is due to respond to the suit. Before then, the judge has to decide whether to sign off on the delay. If the motion is denied, brokers are back to preparing for a Jan. 1 start with roughly three months on the clock.
