Illinois agrees to six-month delay of crypto tax as industry continues court battle

Illinois has agreed with industry representatives to seek a six-month postponement of the states 0.2% Digital Asset Tax, according to the groups that negotiated the arrangement. The delay would move the taxs effective date to July 1, provided a Sangamon County judge approves the joint request the parties planned to file on Thursday. The agreement is intended to let courts resolve the legal disputes without the immediate pressure of an upcoming compliance deadline. The tax, approved by Illinois lawmakers in June, targets crypto-related activity by businesses that exceed $100,000 in receipts and encompasses both transaction activity and accepting assets for storage. Crypto trade groups had asked a state court on Sept. 9 for a temporary stop, arguing the levy would impose significant compliance costs on firms preparing for its January start. Industry groups contend the law is invalid under Illinois state law and unconstitutional, and they argue it may be preempted by the federal Internet Tax Freedom Act. The filing reviewed by CoinDesk states both sides seek the delay "in the interest of justice while the matter works towards resolution on the merits." Digital Chamber CEO Cody Carbone said the pause gives businesses relief from costly compliance obligations while the industry pursues permanent repeal through the courts. If the court signs the joint request, the parties expect to avoid immediate fights over injunctions and to focus instead on the underlying legal questions about the Digital Asset Tax Act's constitutionality and enforceability. The outcome of those court proceedings will determine whether the tax takes effect after the proposed delay or is blocked or overturned permanently.