QuantCapBoth sides agreed the 0.2% tax should be put off until July 1, if the court approves the deal, which will let the state and industry focus on the legal dispute.
Illinois agrees to six-month delay of crypto tax as industry continues court battle
Both sides agreed the 0.2% tax should be put off until July 1, if the court approves the deal, which will let the state and industry focus on the legal dispute.
The new 0.2% Illinois crypto tax that’s worried the industry is expected to be postponed six months to July 1, assuming a judge approves the agreement between state officials and crypto industry representatives. The Digital Chamber and Illinois Blockchain Association negotiated a delay to allow the legal arguments to be conducted in court without the tax looming so closely.
The surprise crypto tax sprung by Illinois earlier this year may not start on January 1 after Illinois agreed to postpone it for six months, according to the industry groups that negotiated the delay, which will still need sign-off from a judge.
The Digital Chamber and Illinois Blockchain Association reached that accord with state officials, the Chamber told CoinDesk, and it could take some of the pressure off the looming tax as crypto interests continue trying to kill the idea. In June, Illinois' government had approved the 0.2% tax on crypto activity involving firms who exceed $100,000 in receipts — including all transaction activities and accepting assets for storage.
The joint request for a delay is expected to be filed Thursday morning in the state circuit court in Sangamon County. If approved, the sides can skip haggling over legal injunctions and focus on the next stage in the court dispute, the "disputed issues of law regarding the constitutionality and enforceability" of the state's Digital Asset Tax Act.
Crypto advocacy groups — which have combined efforts to oppose the Illinois plan — had previously asked a state court on September 9 to grant a temporary stop as the industry complained of the costs companies were already weathering to brace themselves for it.
"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businesses and users relief from costly compliance obligations while we continue to seek to have this tax permanently repealed through the courts," said Digital Chamber CEO Cody Carbone in a statement.
The industry has disputed the validity of the tax under state law and has argued it's unconstitutional. In addition, crypto organizations contend that it's preempted by federal law in the Internet Tax Freedom Act.
The filing, reviewed by CoinDesk, will argue that both parties are seeking the delay "in the interest of justice while the matter works towards resolution on the merits."
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