The Complete Illinois Airbnb Host Lodging Tax Guide: Airbnb Illinois Occupancy Tax Breakdown

Whether you’re managing a cozy lakefront cottage in Lake Michigan or a sleek downtown Chicago apartment, understanding your lodging and occupancy tax obligations is crucial to running a successful and compliant Airbnb business in Illinois. Here’s everything you need to know about lodging and occupancy taxes in Illinois for 2025, helping you avoid potential penalties.

State-wide Lodging and Occupancy Taxes in Illinois

All short-term stays in Illinois incur the Illinois Hotel Operators’ Occupation Tax (HOOT). This state excise tax is levied at 6% of 94% of the gross rental receipts on rentals of less than 30 days​. The tax base usually includes charges such as cleaning fees and other fees. This existing HOOT is the host’s responsibility and does not force platforms like Airbnb or VRBO to collect and remit them for hosts. However, Airbnb does automatically collect and remit the HOOT in some Illinois locations. Make sure to clarify with local authorities.

Beginning on January 1, 2026, a new Short-Term Rental Occupation Tax takes effect as an amendment of the Hotel Operator’s Occupation Tax through SB1749. The 6% of 94% tax is now imposed on the transactions facilitated by a hosting platform. Thus, Airbnb, VRBO, and other platforms are now required by law to automatically collect and remit these new taxes (split at 5% and 1% of 94% of gross receipts) for Illinois short-term rentals.

While remittance and collection are passed onto the marketplace platforms, Operators and Hosts are still required to obtain a business license from the Illinois Department of Revenue.

County-Specific Local Tax Requirements

Beyond state taxes, some Illinois municipalities also impose their own lodging taxes. Most municipalities with their own taxes impose a Hotem/Motel tax with varying rates.

Cook County (outside Chicago)

Cook County (the rest of Cook County except Chicago) levies a 1.0% Hotel Accommodations Tax on room rentals​. This county tax is in addition to the state HOOT (6% of 94%). Revenues go into the County’s general and tourism funds.

Evanston City

The City of Evanston imposes a “Hotel-Motel, B&B, and Vacation Rental Tax” of 7.5% on short-term stays​. This tax supports Evanston’s general budget and tourism (convention and visitor services).

Chicago City

Chicago imposes multiple lodging taxes on short-term rentals. The City of Chicago hotel tax is 4.5% of gross rent plus a 6% surcharge on short-term rentals, for a total 10.5% city tax rate. On top of that, Illinois also two collects additional hotel taxes in Chicago: 2.5% for the Metropolitan Pier & Exposition Authority (MPEA) and 2.0% of 98% for the Illinois Sports Facilities Authority (ISFA), each on gross receipts.

Revenues fund general city operations, including domestic violence programs and the Chicago Sports Authority.

Example Calculation for a Property in Chicago: A 3-night stay at $150 per night.

• Total nightly Rate: $150 x 3 = $450
• Cleaning Fee: $50
• Total Listing Price for a 3-night stay: ($150 × 3) + $50 = $500
• Illinois State HOOT Tax (6% of 94% gross): $500 x 0.94 x 0.06 = $28.2
• ISFA Tax (2% of 98% gross): $500 x 0.98 x 0.02 = $9.8
• Chicago Hotel Tax (Total of 10.5%): $500 x 0.105 = $52.5
• MPEA Tax (2.5%): $500 x 0.025 = $12.5
• Total Tax Collected: $103
• Total Guest Payment: $500 + $103 = $603

Naperville City

Naperville levies a 5.50% Hotel and Motel Use Tax on room rentals​. Proceeds partly fund the Naperville Convention & Visitors Bureau and general municipal services​.

Springfield City

Springfield imposes an 8% Hotel/Motel Tax on hotel stays​. The revenue feeds the city’s general fund for services and tourism promotion.

Danville City

Danville’s code imposes a 7% tax on the gross rent of hotel rooms​. This covers all lodging, including Airbnb and other short-term rentals. Funds go to tourism and city revenue.

East Peoria

East Peoria charges a 6% Hotel/Motel Occupancy Tax, as per city ordinance. These funds support city services and promote tourism. Short-term rental operators in East Peoria must pay this 6% tax​ when collecting rent.

East St. Louis

The City of East St. Louis levies a 10% Hotel/Motel Occupancy Tax on lodging. (Proceeds are used for municipal services and economic development.) Operators of rentals must collect and remit this 10% tax to the city.

LaSalle

LaSalle imposes a 5% Hotel/Motel Renting Tax​ on all hotel and short-term rentals. This revenue is earmarked for city tourism and general fund. Lessors (owners or platforms) are required to collect and remit the 5% from guests.

Libertyville

Libertyville charges a 5% hotel/motel tax on lodging rentals. The tax revenue supports local government and tourism. Per village code, any facilitator or owner renting rooms is to collect 5% from the guest.

Marion

Marion’s municipal code includes a 6% Hotel Use Tax​ on hotel room rentals. It applies to short-term rentals and other lodging (with short-term being anything under 7 days)​. The 6% funds city operations and tourism promotion. The law requires hotel owners or operators to collect the 6% tax from occupants.

Milan

Milan levies a 5% Hotel/Motel Use Tax on short stays. This tax is passed to the city’s visitors and general funds. Owners/operators of rentals must collect and remit 5% on the gross rental amount.

Wrapping Things Up

Understanding and complying with Illinois lodging tax requirements is essential for running a successful and legally compliant short-term rental business. While platforms like Airbnb collect some taxes automatically, hosts remain responsible for ensuring all applicable taxes are properly handled.

These tax ranges are meant for general information purposes. Local counties and even cities can have more specific rates that only apply to them. For this reason, we still highly recommend checking out the local STR regulations in your area or contacting local officials for more information.