TLDR
- Illinois and two crypto groups jointly seek a six-month delay for the 0.2% Digital Asset Tax.
- The proposed new start date would move from January 1 to July 1, 2027.
- Plaintiffs challenge the law under both the Illinois Constitution and federal law.
- State officials dispute the legal claims but agreed that the court should review them before collection starts.
- The Sangamon County court has not yet approved the requested preliminary injunction.
Illinois officials and two crypto trade groups asked a Sangamon County court to delay the state’s Digital Asset Tax. The request would move the 0.2% levy from January 1 to July 1, 2027, while judges review constitutional challenges.
Illinois Seeks Six-Month Tax Delay
The motion in Case No. 2026-MR-271 asks the Circuit Court of Sangamon County to pause the tax until July 1, 2027. The Chamber of Digital Commerce and Illinois Blockchain Association filed the request with Revenue Director David Harris and Attorney General Kwame Raoul.
The request follows Illinois tax officials’ publication of draft rules for the 0.2% digital asset tax. Those rules address stablecoins, decentralized finance, bridges, and wallet transfers. The Department of Revenue is accepting comments through October 30.
Court Motion Keeps Legal Fight Open
The parties say a six-month delay would give the court time to review questions without changing either side’s position. The injunction would start when the court enters the order and remain until July 1 unless the judge modifies it.
The motion gives the defendants until November 13, 2026, to answer the amended complaint. Neither side concedes any allegation, legal claim, defense, or issue of fact. The agreement addresses timing and does not settle the lawsuit.
Constitutional Claims Remain Disputed
The plaintiffs argue that the tax violates the Illinois Constitution and federal law. Their claims cover uniform taxation, due process, penalties, personal property taxation, interstate commerce, and the Internet Tax Freedom Act. Recent CFTC guidance on tokenized assets and blockchain records shows regulatory activity.
The state disputes those allegations. The CFTC guidance explains how derivatives rules apply to tokenized investments and onchain recordkeeping, separate from the Illinois tax case.
Tax Rules Continue During Court Review
Illinois adopted the Digital Asset Tax Act in June. The law directs digital asset brokers to collect 0.2% of the value tied to qualifying digital asset business activity that customers receive in the state. Without court action, collections would begin January 1, 2027.
Federal agencies are also issuing narrower crypto guidance while Congress debates wider rules. Recent SEC guidance on token buybacks and liquid staking addressed how staff views apply to certain token functions and staking receipts. The Sangamon County court has not yet ruled on the agreed request. Until the judge enters an order, the January 1 start date remains in the statute, and the constitutional case continues.
