Illinois has agreed to seek a six-month delay to its 0.2% crypto transaction tax, moving the proposed enforcement date from Jan. 1 to July 1, 2027, according to an agreed court motion.
Summary
- Illinois and industry plaintiffs have asked the court to approve a six-month delay.
- Crypto groups argue that the January deadline would require millions of dollars in compliance spending.
- Draft rules explain how the levy could cover stablecoins and some fee-based wallet transfers.
- A separate federal crypto tax bill cleared a House committee in a 38–5 vote.
The joint court motion asks for a preliminary injunction preventing the January rollout. Illinois submitted the agreed request with the plaintiffs, the Digital Chamber and the Illinois Blockchain Association, proposing July 1, 2027, as the replacement date.
The filing describes an agreement between the parties to request court relief, rather than a final judgment on whether the tax is lawful. Under the requested timetable, enforcement would be postponed while the legal challenge continues.
Illinois crypto tax delay follows compliance objections
In their earlier request for a preliminary injunction, the Blockchain Association and Crypto Council for Innovation argued that preparing for the January deadline would force their organizations and members to spend millions of dollars on compliance.
According to the Blockchain Association and Crypto Council for Innovation’s injunction request, companies faced an accelerated timetable for building systems to comply with the Digital Asset Tax Act. The groups also argued that the industry would suffer irreparable harm even if businesses completed that work before implementation.
Their request sought to prevent enforcement while the court considered the underlying challenge. As reported on Sep. 30, the groups filed their injunction request in Sangamon County on Sep. 9, alleging violations of federal and Illinois law.
The Digital Chamber pursued a separate challenge in July. In its complaint, the organization argued that Illinois had imposed different tax treatment on comparable financial activity solely because ownership was recorded or transferred through blockchain technology.
As crypto.news reported on July 22, the Chamber’s constitutional challenge to Illinois asked the court to declare the law “void and unenforceable.” The organization contended that the distinction unfairly targeted digital asset commerce.
The disputed levy targets transactions rather than profits
Under the framework described in the earlier reporting, Illinois would impose a 0.2% levy on covered digital asset activity involving brokers. Exchange, transfer and storage services can fall within its scope, rather than only transactions that produce an investment gain.
According to tax advisory firm BDO, covered brokers would have to register with the Illinois Department of Revenue, collect the levy separately and submit monthly reports. BDO also said certain companies outside Illinois could qualify when receipts from customers in the state reach $100,000 annually.
For token holders, the state’s proposed implementation rules address activity beyond buying and selling crypto. The department’s draft treats stablecoins as covered digital assets while excluding NFTs.
In its Sep. 30 account of draft crypto tax rules, the publication reported that a transfer from an exchange wallet to a customer’s personal wallet could be taxable when the exchange charges a transfer fee. Under the draft, direct transfers between personally controlled wallets without a paid broker would receive different treatment.
The department also distinguishes DeFi protocol fees from payments directed solely to liquidity providers. According to the proposed rules, a platform collecting protocol fees could qualify as a broker, while network fees paid to miners or validators would not count as qualifying consideration.
In a Sep. 28 notice, the Illinois Department of Revenue said it would accept comments through Oct. 30. The department stated that the draft had not been filed with the Secretary of State or submitted to the Joint Committee on Administrative Rules.
Federal crypto tax legislation has cleared a House committee
At the federal level, the House Ways and Means Committee approved the Digital Asset Tax Certainty Act, H.R. 10357, on Sep. 16. The panel’s 38–5 crypto tax vote advanced the proposal for consideration by the full House.
According to the committee-approved text described in that report, taxpayers would not recognize gains or losses when using eligible digital assets to pay qualifying network or transaction fees of up to $10. The provision would cover certain validation, brokerage, trading, and liquidity fees, subject to restrictions.
The proposed exception concerns qualifying fees rather than a general exemption for small crypto purchases. Under the bill, certain brokers, dealers, validators and high-volume taxpayers would face exclusions.
Other provisions address digital asset lending, stablecoins, mining, staking, broker reporting and wash-sale treatment. According to the Joint Committee on Taxation estimate cited in the report, the complete bill would raise a net $500 million in federal revenue over fiscal 2027–2036.
Committee approval did not enact the measure. As the Sep. 16 report explained, both congressional chambers would need to approve identical legislation before sending it to the president.
CLARITY negotiations remain separate from tax reform
The federal tax vote followed the Senate’s Sep. 15 rejection of cloture on the motion to proceed with the CLARITY Act. According to the official roll call cited in earlier reporting, the motion received 49 votes in favor and 50 against, falling short of the 60 needed to open debate.
Unlike H.R. 10357, CLARITY addresses digital asset market structure and the division of responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Following the failed vote, seven Democratic senators pledged to continue bipartisan CLARITY talks. Their Sep. 16 statement described the result as “not the end” of their work on the legislation.
In comments published on Sep. 17, Coinme CEO Neil Bergquist said federal market structure legislation would not eliminate state licensing obligations for crypto businesses. He explained that the bill principally concerned asset classification and federal oversight.
According to the senators’ statement, Kirsten Gillibrand, Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, Mark Warner and Raphael Warnock would continue seeking a bipartisan agreement after two years of negotiations.
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