Illinois has decided to postpone its 0.2% cryptocurrency tax for six months, pushing the start date to July 1, contingent upon judicial approval of the agreement. This delay aims to allow both state officials and the crypto industry to concentrate on their ongoing legal battle.
The Digital Chamber and the Illinois Blockchain Association successfully negotiated this postponement, as confirmed by the Chamber, to alleviate pressure from the impending tax while legal arguments unfold. Initially approved in June, the tax applies to cryptocurrency transactions for businesses with receipts exceeding $100,000, covering all transaction activities and asset storage.
A joint request for the delay is expected to be submitted to the Sangamon County circuit court. If the court grants approval, both parties can bypass disputes over legal injunctions and concentrate on advancing the case, particularly regarding the constitutionality and enforceability of the state's Digital Asset Tax Act.
Crypto advocacy groups, which have united in opposition to the Illinois tax plan, previously sought a temporary halt from the state court. They argued that companies were already incurring significant costs in preparation for the tax.
Digital Chamber CEO Cody Carbone expressed satisfaction with the state's decision to delay the tax's implementation, stating it provides relief from expensive compliance obligations while they pursue a permanent repeal through legal channels.
The industry contends that the tax violates state law and is unconstitutional, claiming it is also overridden by federal law under the Internet Tax Freedom Act. The forthcoming filing will assert that both parties are advocating for the delay "in the interest of justice while the matter works towards resolution on the merits."