Illinois state officials and two crypto industry groups have jointly asked a Sangamon County court to postpone the launch of the state’s new digital asset tax by six months. The request would move the effective date of the Digital Asset Tax Act from Jan. 1, 2027 to July 1, 2027 while a broader legal fight continues.

The agreed motion says the delay would preserve the status quo and give the court time to receive briefing and rule on the underlying disputes without harming either side’s position. The filing does not settle the case, and both the state and the industry groups are maintaining their claims and defenses.

Challenge to a newly signed law

The dispute centers on the Digital Asset Tax Act, or DATA, which Governor JB Pritzker signed into law in July. The measure created a 0.2% tax tied to certain digital asset activity involving Illinois customers.

Industry opponents argue the law is unconstitutional and too vague to administer cleanly. They say it could lead to the same transaction being taxed more than once and contend that the measure conflicts with provisions of the Illinois Constitution as well as the U.S. Constitution’s Commerce Clause and Due Process Clause. They also argue federal law may preempt the state measure. Illinois officials reject those arguments.

What transactions the tax would cover

Under DATA, the 0.2% tax would apply to digital assets involved in qualifying transactions for Illinois customers. The law covers exchange, transfer, or storage of digital assets when a transaction is recorded on a blockchain and is facilitated by a qualifying broker.

The broker definition is broad. According to the law, it includes centralized exchanges, some decentralized finance platforms that collect fees, custodians, broker-dealers, and digital payment processors, subject to certain exclusions. At the same time, retailers that accept cryptocurrency as payment are exempt from being treated as digital asset brokers.

Why both sides agreed to a delay

The joint request asks the court to temporarily hold off the tax’s rollout until July 1, 2027 unless the court changes that timeline. By seeking a pause together, the parties are asking for time to litigate the constitutional and regulatory questions before the law takes effect.

The motion frames the delay as a procedural step rather than a decision on the merits. It is intended to avoid prejudicing either side while the court considers whether the law can be enforced as written.

Broader litigation remains unresolved

The latest filing comes after multiple lawsuits were brought against the law following its signing. The Digital Chamber and other groups have already raised constitutional and regulatory objections in court.

For now, the immediate next step is the court’s response to the agreed motion. If granted, the start of the tax would be pushed to July 1, 2027, while the underlying challenge to DATA continues on the merits.

Source: news.bitcoin.com