Illinois has not yet delayed its new digital asset tax: the state and two industry groups have asked a court to postpone its January 1, 2027 start until July 1, 2027, but the request was still pending in the latest reporting, dated October 2, 2026. The proposed delay would give the parties time to litigate their challenges; it would not decide whether the tax is lawful.
What Illinois agreed to—and what has not happened
Illinois and the Digital Chamber and Illinois Blockchain Association jointly asked a Sangamon County Circuit Court to postpone the Digital Asset Tax Act’s scheduled start by six months. The requested injunction would keep the tax from taking effect until July 1, 2027, unless the court modified or dissolved its order sooner. As of the October 2, 2026 report, the court had not ruled, so January 1, 2027 remained the date in the enacted statute. CoinDesk reported the agreement on October 1; BlockchainReporter reported the request remained undecided on October 2.
The requested pause is procedural, not a settlement of the legal dispute. The groups first sought temporary relief on September 9, arguing that businesses were already incurring compliance costs as they prepared for the tax. The joint request would give the case time to proceed without the scheduled start date approaching during that process.
What the Illinois Digital Asset Tax Act covers
Public Act 104-0468 imposes a tax of 0.2% of the value of covered digital asset business activity received by a customer in Illinois. A broker that makes or effects the covered activity is responsible for collecting it. The act’s definitions include activities such as selling, transferring and storing digital assets through a broker. A transfer can include moving an asset between a customer’s accounts or storage, as well as relinquishing control to another person. Read Public Act 104-0468.
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This is not a general personal income tax on cryptocurrency holdings or gains. The statute describes a tax on specified business activity, collected by brokers. The amount due in a particular transaction depends on whether it is covered and on the value of that activity; the statute’s 0.2% rate applies to that value.
Why industry groups are challenging the tax
The industry plaintiffs argue that the act conflicts with state and federal law. The October 2 report described claims involving Illinois constitutional uniformity, due process, proportionate penalties and personal-property taxes, as well as federal Commerce Clause, due process and Internet Tax Freedom Act arguments. These are allegations by the challengers, not findings by a judge. The state defendants dispute the claims, and the court had not decided the merits in the reporting available as of October 2.
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Digital Chamber CEO Cody Carbone framed the requested delay as relief from preparation costs while the groups seek repeal through the courts: “We’re pleased that the State of Illinois has agreed to delay implementation of its Digital Asset Tax, giving digital asset businesses and users relief from costly compliance obligations while we continue to seek to have this tax permanently repealed through the courts.” That statement describes the industry’s position; it does not mean a court has granted an injunction.
Draft rules and the public-comment deadline
The court request is separate from Illinois Department of Revenue rulemaking. On September 28, 2026, IDOR posted draft proposed rules and invited public comments through October 30, 2026. The department said the drafts had not been filed with the Secretary of State or submitted to the Joint Committee on Administrative Rules (JCAR). They are not final rules, and their publication does not establish that the requested court delay has been granted. See IDOR’s Digital Asset Tax information.
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How the Illinois tax differs from federal broker reporting
The Illinois tax and federal digital asset broker reporting are separate regimes. The Illinois law imposes a state tax on covered activity and assigns collection to brokers. Federal Treasury and IRS rules require information reporting; they are not a new federal tax on digital assets.
| Feature | Illinois Digital Asset Tax Act | Federal broker reporting |
|---|---|---|
| Authority | Illinois statute, Public Act 104-0468 | U.S. Treasury and IRS final regulations implementing the Infrastructure Investment and Jobs Act |
| Mechanism | 0.2% tax on the value of covered digital asset business activity received by an Illinois customer; brokers collect it | Broker information reporting on digital asset transactions; not a tax imposed by the reporting rule |
| Key dates | Scheduled to start January 1, 2027; the requested July 1, 2027 postponement remained pending in the October 2, 2026 reporting | Gross-proceeds reporting begins in 2026 for sales made in 2025; certain tax-basis reporting begins in 2027 for sales made in 2026, according to Treasury and IRS |
| Status in cited sources | Enacted statute; requested court injunction unresolved in October 2, 2026 reporting | Treasury described the federal requirements as final regulations in its June 28, 2024 announcement |
The Treasury and IRS announcement of June 28, 2024 explained that the Infrastructure Investment and Jobs Act created reporting requirements, not a new digital asset tax. Treasury and IRS said: “Owners of digital assets have always owed tax on the sale or exchange of digital assets, and the IIJA did not change that or impose any new taxes on digital assets.” Those federal reporting dates should not be mistaken for the Illinois tax’s start date.
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What Illinois residents and digital asset businesses should watch
- Court action: The key unresolved question is whether the court enters the requested order postponing the January 1, 2027 start. The October 2 report is the latest procedural status established here; later docket activity is not confirmed.
- Rulemaking: IDOR’s stated public-comment deadline for its posted draft proposed rules is October 30, 2026. The drafts had not yet been formally filed or submitted to JCAR as of the department’s September 28 notice.
- Scope and collection: For activity that may be covered, the statute identifies brokers making or effecting it as collectors. The tax is tied to covered activity value, not simply to owning cryptocurrency.
- Federal tax reporting: Keep the federal information-reporting requirements distinct from the state tax. A broker reporting a transaction federally does not mean Illinois has already collected this state tax.
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