Illinois Seeks Six-Month Delay to Digital-Asset Tax

On Oct. 1, trade groups and Illinois officials filed a joint motion in Sangamon County asking a judge to push the start of the state’s digital-asset tax from Jan. 1, 2027, to July 1, 2027 while a constitutional challenge moves through court. The filing would pause broker collection duties and related customer liabilities for six months if the court grants the request.

The motion was filed by The Digital Chamber and the Illinois Blockchain Association and joined by Revenue Director David Harris and Attorney General Kwame Raoul. The parties asked the court to move the state’s deadline for responding to the lawsuit to Nov. 13. As of Oct. 4 the court had not entered the proposed order.

Illinois enacted the Digital Asset Tax in June. The statute imposes a 0.2% levy on the value of digital assets involved in certain covered transactions rather than on trading profits. The law assigns collection and remittance responsibilities to brokers. Customers face a fallback obligation: if a broker does not collect the tax, customers may have to calculate and pay the amount themselves by the 20th of the following month.

Draft rules from the Illinois Department of Revenue outline how transfers could be treated. A fee-paid withdrawal from a broker to a self-custody wallet can qualify as a covered transaction when the statute’s conditions are met. A direct transfer without a covered broker may fall outside the levy.

Those draft rules remain under public comment through close of business Oct. 30 and have not been filed with the Secretary of State or submitted to the Joint Committee on Administrative Rules. Key implementation details and reporting requirements have not been finalized.

If the court grants the requested injunction, brokers would be temporarily relieved of collection and remittance duties and covered customers would not face immediate collection obligations for the first half of 2027. The constitutional challenge to the law would continue during that pause.

State officials who joined the filing continued to defend the statute and did not seek repeal. The joint request preserves the legal positions of both sides while pausing the start date to allow litigation and rulemaking to proceed.

Industry groups have warned the levy could raise compliance costs and prompt some activity to move outside Illinois. A court-approved delay would give exchanges and other firms additional time to build collection and reporting processes, but would not stop the Revenue Department from revising draft rules or accepting public input.

The two unresolved questions before year-end are whether the judge will approve the agreed six-month delay and how the Department of Revenue will revise its draft rules after industry comments are received.