Illinois and two crypto industry trade groups asked a Sangamon County court on Wednesday, October 1, to push the effective date of the state’s digital asset transaction tax from January 1 to July 1, 2027, according to the agreed motion filed by the parties. The stipulated request for a preliminary injunction marks the first time the state has agreed to delay the 0.2% levy, the nation’s first state-level tax on crypto transactions, while constitutional challenges move through the courts.
What the agreed delay would do
The filing, docketed as Case No. 2026-MR-271, asks the Circuit Court of Sangamon County to enjoin, stay, and continue the effective date of the Digital Asset Tax established by the Digital Asset Tax Act, Article 3 of Public Act 104-0468. The tax is currently set to take effect on January 1, 2027. The parties, the Chamber of Digital Commerce and the Illinois Blockchain Association as plaintiffs and David Harris, director of the Illinois Department of Revenue, and Attorney General Kwame Raoul as defendants, agreed that continuing the effective date to July 1, 2027 “will permit orderly briefing and adjudication of the underlying legal questions without prejudicing any Party’s rights, claims, or defenses on the merits.”
The constitutional fight behind the filing
Plaintiffs sued in July and amended their complaint on September 1, arguing the Act violates the Illinois Constitution’s uniformity, due process, and proportionate penalties clauses and its ban on ad valorem taxation of personal property, and that it also conflicts with the U.S. Constitution’s Commerce Clause, the Fourteenth Amendment’s due process clause, and the federal Internet Tax Freedom Act. The Digital Chamber’s original July lawsuit challenged the tax on the grounds that Illinois singled out blockchain-recorded transactions for different treatment, and a coalition of crypto advocates joined the legal fight last month. The motion states the defendants dispute the allegations but agree the legal issues should be resolved before the tax takes effect.
What happens next
Under the agreed terms, the preliminary injunction would take effect immediately upon the court’s entry and remain in force until July 1, 2027 unless modified or dissolved by a further order. Defendants would receive an extension to respond to the amended complaint until November 13, 2026. The motion stresses that the delay is procedural rather than a resolution: no party admits any allegation, waives any claim or defense, or concedes any issue of law or fact, and all rights and defenses are expressly reserved. The court has not yet ruled on the request.
