February 26, 2020
SUMMARY
This annual report lists and describes selected consumer taxes within the City of Chicago. For ease of use by non-specialists, the taxes in this report are grouped under the following categories: sales taxes, tobacco and nicotine-related taxes, beverage-related taxes, utility-related taxes, accommodations-related taxes, transportation-related taxes and other taxes. It is important to note for tax professionals that the groupings are not related to how the taxes are imposed or collected, but are simply for ease of use by the general public. The tax rates presented in this report are effective as of January 1, 2020, with the exception of the City of Chicago ground transportation tax that went into effect on January 6, 2020 and the local cannabis sales tax that will go into effect July 1, 2020.
The taxing authorities that impose taxes on consumers in the City of Chicago include the federal government, State of Illinois, Cook County, City of Chicago, Regional Transportation Authority, Metropolitan Pier and Exposition Authority, and Illinois Sports Facilities Authority. It is important to note that many goods that are subject to specific excise taxes (e.g. alcohol tax and motor fuel tax, etc.) are also subject to the general sales tax.
City and County Tax Categorization
For the purposes of this report, taxes for Cook County and the City of Chicago have been organized into two categories: municipal or county; and home rule.
Municipal or county refers to the taxing authority granted by the State of Illinois to all municipalities or counties and is distinct from taxes imposed by virtue of home rule status. An example of this type of tax is the City of Chicago’s Municipal Automobile Rental Tax. The State authorizes any municipality in Illinois to impose a tax on automobile rentals and limits the amount of the tax.
Taxes categorized as municipal and county can also include taxes imposed by the State of Illinois, where a portion of the tax revenue is distributed to municipalities or counties. For example, Illinois’ State sales tax rate is 6.25%, of which 5.0% of the sales tax revenue goes to the State, 1.0% goes to all municipalities, including Chicago, and the remaining 0.25% goes to the counties. However, Cook County’s 0.25% share of the State sales tax is distributed to the Regional Transportation Authority.
Home rule refers to the taxing authority granted by the State of Illinois to home rule municipalities to impose taxes not otherwise prohibited by the Constitution (Article VII, Section 6). Both Cook County and the City of Chicago are home rule units of government. According to the Illinois Constitution, a municipality can qualify as home rule if it has a population of at least 25,000 or through referendum. A county with a chief executive officer elected by the county electorate may also become home rule. Cook County is the only home rule county in Illinois. An example of a home rule tax is the City of Chicago’s Bottled Water Tax, which the City can impose because it is a home rule unit of government and because the State has not prohibited it.
The following table provides a summary of all of the taxes and tax rates imposed within the City of Chicago.
| Summary Table: Selected Consumer Taxes in Chicago as of January 1, 2020† | ||||||||||
| (see accompanying narrative for details) | ||||||||||
| Federal | State | Cook County | City of Chicago | RTA1 | MPEA2 | ISFA3 | TOTAL | |||
| County | Home Rule | Municipal | Home Rule | |||||||
| Sales Related Taxes | ||||||||||
| General Merchandise (including motor fuel & restaurant purchases) | -- | 5.0%4 | -- | 1.75% | 1.0% | 1.25% | 1.25%5 | -- | -- | 10.25% |
| Food & Drugs | -- | -- | -- | -- | 1.0% | -- | 1.25% | -- | -- | 2.25% |
| Restaurant Tax* | -- | -- | -- | -- | 0.50% | -- | 1.0% | -- | 1.50% | |
| Cannabis Related Taxes** | ||||||||||
| Medical Cannabis6 | -- | -- | -- | -- | 1.00% | -- | 1.25% | -- | -- | 2.25% |
| Recreational Cannabis* | -- | 10-25% | 3.00% | 3.00% | -- | -- | 16.00-31.00% | |||
| Tobacco Related Taxes* | ||||||||||
| Cigarette (per pack) | $1.01 | $2.98 | -- | $3.00 | -- | $1.18 | -- | -- | -- | $8.17 |
| Smoking tobacco (per ounce) | $0.17 | 36% of wholesale price | -- | $0.60 | -- | -- | -- | -- | -- | 36.00% + $0.77 |
| Smokeless tobacco (per ounce) | $0.03 to $0.09 | $0.30 | -- | $0.60 | -- | -- | -- | -- | -- | $0.93 to $0.99 |
| Little cigar (per unit) | $0.05 | $2.98 | -- | $0.05 | -- | -- | -- | -- | -- | $3.08 |
| Large cigar (per unit) | 52.75% of sales price7 | 36% of wholesale price | -- | $0.30 | -- | -- | -- | -- | -- | 88.75% + $0.308 |
| Liquid Nicotine Products | -- | 15% of wholesale price | -- | $0.20 per milliliter of liquid | -- | $1.50 per unit plus $1.20 per milliliter | -- | -- | -- | 15% + $1.50 per unit + $1.40 per milliliter |
| Beverage Related Taxes | ||||||||||
| Liquor Tax (per gallon)* | ||||||||||
| Beer9 | $0.58 | $0.231 | -- | $0.09 | -- | $0.29 | -- | -- | -- | $1.19 |
| Wine (range based on alcohol content and type) | $1.07 to $3.40 | $1.39 | -- | $0.24 to $0.45 | -- | $0.36 to $0.89 | -- | -- | -- | $3.06 to $6.13 |
| Distilled Liquor | $13.5010 | $8.55 | -- | $2.50 | -- | $2.68 | -- | -- | -- | $27.23 |
| Fountain Soft Drink Syrup Tax | -- | -- | -- | -- | -- | 9.0% | -- | -- | -- | 9.0% |
| Soft Drink Tax | -- | -- | -- | -- | -- | 3.00% | -- | -- | -- | 3.00% |
| Bottled Water Tax (per bottle)* | -- | -- | -- | -- | -- | $0.05 | -- | -- | -- | $0.05 |
| Utility Related Taxes | ||||||||||
| Electricity Infrastructure Fee per kwh (base rate)11 | -- | -- | -- | -- | $0.0053 | -- | -- | -- | -- | $0.0053 |
| Electricity Use Tax per kwh (base rate)11 | -- | $0.0033 | -- | -- | $0.00610 | -- | -- | -- | -- | $0.0094 |
| Natural Gas Utility Tax | -- | $0.024 per therm or 5.0%12 | -- | -- | 8.0%13 | -- | -- | -- | -- | ≤13.00% |
| Gas Use Tax | -- | $0.024 per therm or 5.0% | $0.063 per therm | $0.024 per therm or 5.0% + $0.063 per therm | ||||||
| Water-Sewer Tax (per 1,000 gallons) | -- | -- | -- | -- | -- | $2.51 | -- | -- | -- | $2.51 |
| Accomodation Related Taxes | ||||||||||
| Hotel Operators' Tax | -- | 6.17% | -- | 1.00% | 1.08% | 4.50% | -- | 2.50% | 2.14% | 17.39%14 |
| Home Sharing Tax | 6.00% | 6.00%15 | ||||||||
| Transportation Related Taxes | ||||||||||
| Motor Fuel (per gallon)* | ||||||||||
| Gasoline16 | $0.184 | $0.391 | -- | $0.06 | -- | $0.05 | -- | -- | -- | $0.69 |
| Diesel16 | $0.244 | $0.466 | -- | $0.06 | -- | $0.05 | -- | -- | -- | $0.82 |
| Wheel Tax (Vehicle Registration) per small passenger automobile (per year) | -- | $151.00 | -- | $80 (unincorporated areas only: see note 17) | -- | $90.88 | -- | -- | -- | $231.00 or $241.88 |
| Wheel Tax (Vehicle Registration) per large passenger automobile (per year) | -- | $151.00 | -- | $100 (unincorporated areas only: see note 18) | -- | $144.33 | -- | -- | -- | $251.00 or $295.33 |
| Wheel Tax (Vehicle Registration) per electric vehicle (per year) | $251.00 | $80 (unincorporated areas only: see note 17) | $90.88 | $331.00 or $341.88 | ||||||
| Parking Tax | ||||||||||
| Daily (24 hours or less) | 6.0% | 6.0% | 20.0% to 22.0%19 | 32.0% to 34.0% | ||||||
| Weekly/Monthly/Yearly | 6.0% to 9.0%19 | 9.0% | 22.0% | 37.0% to 40.0% | ||||||
| New Motor Vehicle Tax (per 4-wheel vehicle)* | -- | -- | -- | $15.00 | -- | -- | -- | -- | -- | $15.00 |
| Tire Fee (per new tire)* | -- | $2.50 | -- | -- | -- | $1.00 | -- | -- | -- | $3.50 |
| Automobile Rental Tax | -- | 5.0% | -- | -- | $2.75 per rental period20 | -- | -- | 6.0% | -- | 11.0% + $2.75 |
| Airport Departure Tax | -- | -- | -- | -- | -- | -- | -- | $2.00 to $54.00 | -- | $2.00 to $54.00 |
| Ground Transportation Tax (Transportation Network Providers, i.e. Uber, Lyft) | -- | -- | -- | -- | -- | Single rides: $1.13 to $2.88; Shared rides: $0.53 to $1.1321 | -- | -- | -- | $0.53 to $2.88 |
| Boat Mooring Tax | -- | -- | -- | -- | -- | 7.0% | -- | -- | -- | 7.0% |
| Other Taxes | ||||||||||
| Checkout Bag Tax (per bag) | $0.0722 | $0.07 | ||||||||
| Telecommunications Excise Tax | 3.0% | 7.0% | -- | -- | 7.0% | -- | -- | -- | -- | 17.00% |
| 911 service per network connection (per month) | -- | -- | -- | -- | $5.0023 | -- | -- | -- | -- | $5.00 |
| Personal Property Lease Transaction Tax | -- | -- | -- | -- | -- | 7.25% to 9.0% | -- | -- | -- | 7.25% to 9.0% |
| Real Estate Transfer Tax | -- | $0.50 per $500 (0.1%) | $0.25 per $500 (0.05%) | $1.50 per $500 (0.3%)24 | $3.75 per $500 (0.75%) | -- | -- | -- | $6.00 per $500 (1.2%) | |
| Amusement Tax | -- | -- | -- | 3.0% (1.0% to 1.5% live cultural performances) | -- | 9.0%25 | -- | -- | -- | 10.0% to 12.0% |
| Firearm and Ammunition Taxes* | -- | See note 26 | -- | $25 per firearm; $.01 to $.05 per cartridge | -- | -- | -- | -- | -- | $25 per firearm; $.01 to $.05 per cartridge |
| † All of the tax rates in the table are effective as of January 1, 2020 with the exception of the City of Chicago's ground transportation tax, which is expected to be collected beginning on January 6, 2020, the Chicago wheel tax rate increase is effective February 1, 2020, and the county and muncipal local cannabis sales tax is scheduled to go into effect on July 1, 2020. | ||||||||||
| See notes below and narrative description that follows for more details. | ||||||||||
| Summary Table Notes: | ||||||||||
| Note: "Municipal" and "County" refer to taxing authority granted by state law to municipalities and counties and is distinct from taxes imposed by virtue of home rule status. | ||||||||||
| * Subject to general merchandise sales tax in addition to tax referenced. | ||||||||||
| ** A cultivation privilege tax of 7.0% applies to both medical and recreational sales by a cultivator or craft grower. However, it is not included in this chart because while it could be passed onto a consumer in the purchase price, it is not a direct consumer tax. | ||||||||||
| 1 Regional Transportation Authority (Chicago Transit Authority, Metra, Pace). | ||||||||||
| 2 Metropolitan Pier and Exposition Authority taxes are levied on different geographic areas. The restaurant tax area consists of Stevenson Expressway (south), Ashland Avenue (west), Diversey Avenue (north), Lake Michigan (east) and airports. The hotel tax is throughout Chicago, the airport departure tax is at airports and the automobile rental tax is throughout Cook County. | ||||||||||
| 3 Illinois Sports Facilities Authority (U.S. Cellular Field and Soldier Field). | ||||||||||
| 4 The State collects a tax of 6.25%. The State keeps 5.0% and distributes the remaining 1.25% to local governments. | ||||||||||
| 5 This includes a 1.0% tax by the RTA and the 0.25% county share of sales tax which in Cook County is distributed to the RTA. | ||||||||||
| 6 The State of Illinois requires medical cannabis users to apply for a registration card, which is subject to an application fee of $50-250, depending on the number of years the card is valid and whether the patient qualifies under a reduced application fee. There is also a tax on cannabis cultivators for medical and recreational use, which can be passed on to the purchasing dispensary, processor or infuser. | ||||||||||
| 7 Federal tax is limited to $.4026 per cigar. | ||||||||||
| 8 A $1 surcharge goes to the State Police Vehicle Fund. | ||||||||||
| 9 The State taxes beer and cider at the same rate of $0.231 per gallon. The federal government tax on cider is $0.226 per gallon. | ||||||||||
| 10 The federal government is the only one that taxes distilled liquor based on proof of the distilled alcohol rather than volume. It taxes $13.50 per 100-proof gallon of liquor. See the narrative for more detail. | ||||||||||
| 11 Rates shown for the Electricity Infrastructure Fee and Electricity Use Tax are the base rate for the first 2,000 kilowatt hours of electricity used. As electricity usage increases, additional taxes accumulate at a diminishing rate. The rate for any amount over 20 million kwh is $0.00202. | ||||||||||
| 12 The State rate for natural gas usage is the lesser of $0.024 per therm of gas sold to each customer or 5% of gross revenue from each customer. | ||||||||||
| 13 Large institutions that purchase from providers other than Peoples Energy are subject to $0.063 per therm instead of 8%. | ||||||||||
| 14 This figure represents the effective rate of this tax. See the narrative for more detail. | ||||||||||
| 15 In addition to the 6.0% home sharing tax, the composite hotel tax rate of 17.39% also applies to home sharing in Chicago, for a total home sharing tax rate of 23.4%. | ||||||||||
| 16 Includes $0.003 for Underground Storage Tank Tax and $0.008 for environmental impact fee imposed by the State of Illinois. The City of Chicago's $0.05 Vehicle Fuel Tax also applies to aircraft fuel. | ||||||||||
| 17 Cook County levies wheel taxes in unincorporated portions of the county. The current rate for residents of unincorporated Cook County is $80 per small passenger automobile per year. | ||||||||||
| 18 Cook County levies wheel taxes in unincorporated portions of the county. The current rate for residents of unincorporated Cook County is $100 per large passenger automobile per year. | ||||||||||
| 19 The City of Chicago charges a parking tax rate of 20.0% on weekends (Saturday and Sunday) and 22.0% on weekdays (Monday-Friday). The State of Illinois charges a parking tax rate of 6.0% for a space on an hourly, daily, or weekly basis and 9.0% if paid on a montly or annual basis. | ||||||||||
| 20 The City of Chicago imposes a 9% personal property lease tax on auto rental in addition to the $2.75 per rental of motor vehicle lessor tax. | ||||||||||
| 21 The figure shown in the table applies to transportation network providers, which are rideshare companies such as Uber and Lyft. The base charge per single ride is $1.13. An additional surcharge of $1.75 is charged for rides that begin or end in a designated downtown zone on weekdays between 6am and 10pm. Shared rides have lower rates of $0.53 per shared ride citywide, plus an additional $0.60 for rides that begin or end downtown on weekdays. There is also a $0.10 fee per ride for non-wheel chair accessible rideshare vehicles. Rides with a pick up or drop off at Chicago Airports, Navy Pier and McCormick Place are charged an additional $5.00. Separate Ground Transportation tax rates apply to taxicabs at a rate of $98.00 per month for City cabs and $3.50 per day for suburban cabs. | ||||||||||
| 22 The City of Chicago imposes a $0.07 tax on each checkout bag for sale or use in the City of Chicago. Of the $0.07 tax, the City collects $0.05 of the tax and the retailer keeps the remaining $0.02 of the tax. | ||||||||||
| 23 The $5.00 911 surcharge is applied monthly per network connection or wireless number. The City of Chicago imposes a 9.0% surcharge on prepaid wireless services. The enforcement and collection of this surcharge is administered by the Illinois Department of Revenue. | ||||||||||
| 24 $1.50 per each $500 tax is transferred to the Chicago Transit Authority. | ||||||||||
| 25 The 9.0% tax applies to events at venues with a capacity of 1,500 or more. The City of Chicago also imposes a 3.0% amusement tax on ticket resales. | ||||||||||
| 26 The State of Illinois requires residents to have a Firearm Owners Identification Card in order to purchase a firearm. The fee for the card is $10.00 per ten years. | ||||||||||
|
Sources: Illinois Legislative Research Unit 2019 Tax Handbook for Legislators; Illinois Department of Revenue website; City of Chicago Department of Revenue website; Cook County Department of Revenue website; United States Government Printing Office website; Illinois Compiled Statutes; Code of Ordinances of Cook County, Illinois; Municipal Code of Chicago; and United States Code.
|
||||||||||