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Hotel And Lodging Tax In Illinois 2026: TOT Rates By City
Chicago just created its first tourism district, pushing downtown hotel tax near 19%, and Rosemont taxes long stays with a flat fee instead of exempting them. See 2026 rates by city.
August 28, 2026
8
min. read
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TL;DR
- Illinois calls its state charge the Hotel Operators' Occupation Tax, with cities layering their own separately named local tax on top.
- "Hotel tax," "lodging tax," "occupancy tax," "bed tax," and "hotel accommodations tax" all describe pieces of this stack, but the local name and rate vary by city.
- The state rate is technically 6%, but it's calculated on only 94% of gross rental receipts, producing a true effective rate of about 5.64%.
- Chicago just created its first tourism improvement district in 2026, pushing the composite downtown hotel tax to roughly 19%, among the highest of any major U.S. city.
- Most cities exempt stays of 30 consecutive days or more, but Rosemont instead taxes long stays with a flat $1,000-per-30-day fee rather than exempting them entirely.
- No general Illinois or Chicago fee-transparency law exists, though Chicago's new tourism district charge does have its own narrow disclosure requirement.
- Filing cadence varies significantly by city, and Chicago's new district charge uses an unusual pay-monthly, file-annually structure.
How Illinois's Hotel and Lodging Tax Works
Illinois calls its state charge the Hotel Operators' Occupation Tax. Cities and counties layer their own separately named tax on top under home-rule authority or specific state statutory permission, Chicago and Cook County both call theirs the Hotel Accommodations Tax, while most other cities simply call theirs a hotel or motel use tax.
There's no voter-referendum requirement for adopting or raising a local hotel tax. A home-rule city council or county board can impose or increase the tax by ordinary ordinance, no public vote required. A referendum in Illinois only comes up for a separate, earlier question, whether a smaller municipality becomes a home-rule unit in the first place, not for any specific tax rate change.
The state rate has a quirk worth knowing: it's calculated as 6% of only 94% of gross rental receipts, not the full receipt, producing a true effective state rate of about 5.64% rather than a clean 6%, a formula detail that a simple flat-rate assumption would get wrong.
Tax Rates and Extra Fees
Because local rates, and in some cases zone-based district charges, vary by city, the combined total looks very different depending on location. Here's where the major Illinois markets stand as of 2026.
| City / county | Rate | Notes |
|---|---|---|
| Chicago (downtown TID zone, 100+ rooms) | ~19% composite | 4.5% base city tax plus a new 1.5% Tourism Improvement District charge effective May 2026, combined with state, county, and other taxes; reported as the highest hotel tax of any major U.S. city |
| Chicago (outside the TID zone) | ~17.5% composite | The same base city tax without the new district surcharge, which only applies in 16 specific downtown zip codes |
| Village of Schaumburg | 8% | n/a |
| City of Peoria (inside Hospitality Improvement Zone) | 15% total | State, city, and a 1% zone assessment stack; identical hotels just outside the zone pay 14%, the same city legally splitting into two rates |
| Village of Rosemont | 7% for stays under 30 days; flat $1,000 per 30-day period for longer stays | Home to the Donald E. Stephens Convention Center; also exempts professional athletes renting under 365 days and airline or employer room blocks of 60+ days |
| City of Evanston | 7.5% | Officially the Hotel-Motel and Vacation Rental Tax, with a steep 10% monthly late penalty |
| City of Champaign | 7% | Uses a 29-night threshold for its exemption rather than the standard 30-day language |
| City of Naperville | 5.5% | Filed quarterly rather than monthly |
| City of Bloomington | 6% | Exempts stays over 30 consecutive days and workers living and working in the same hotel |
| Cook County (layered on any Cook County city) | 1% | Applies on top of whatever city and state tax already apply |
Rates change after a local ordinance, so treat this table as a starting point and confirm the current published rate with the specific city before filing.
A separate district assessment is real in Illinois, but confirmed in only two cities. Peoria's Hospitality Improvement Zone adds 1% for hotels inside a defined zone. Chicago's brand-new Tourism Improvement District adds 1.5%, but only for hotels with 100 or more rooms in 16 named downtown zip codes, for an initial five-year term subject to renewal. If a hotel passes that specific 1.5% charge on to guests, Chicago's own ordinance requires it be disclosed in advance, shown as a separate line item, and given its own receipt, a narrow, charge-specific transparency rule, not a general one.
Collection and Remittance
The guest pays the tax, and the property remits it, but the cadence genuinely differs by city. The state's default is monthly, though smaller operators can qualify for quarterly or annual filing. Naperville files quarterly. Bloomington and Evanston both file monthly, due the 25th and 20th respectively. Chicago's new Tourism Improvement District charge is structured unusually: payments are due monthly, but the actual tax return is filed only once a year, on a July-to-June fiscal cycle, a pay-monthly, file-annually pattern not seen in any other Illinois jurisdiction checked.
Exemptions From Illinois's Hotel Tax
Most Illinois jurisdictions, including the state itself and Chicago, exempt stays of 30 consecutive days or more under a binding agreement. Rosemont is a real exception: rather than exempting long stays, it taxes them differently, a flat $1,000 per 30-day period instead of the percentage rate, with its own narrow carve-outs for professional athletes and certain employer housing blocks, written for its convention-district economy specifically.
Common Mistakes Hotels Make With TOT Compliance
- Calculating the state tax on the full room rate. The state formula applies 6% to only 94% of gross receipts, using the full receipt overstates the state tax owed.
- Missing Chicago's new district charge zone boundary. The 1.5% Tourism Improvement District charge only applies to 100+ room hotels in 16 specific downtown zip codes, not citywide.
- Applying a standard 30-day exemption in Rosemont. Rosemont taxes long stays with a flat per-period fee instead of exempting them, a property using the standard exemption there will undercollect.
- Filing Chicago's TID charge on the wrong schedule. Payments are monthly, but the return itself is annual, filing it as if both were monthly misses the actual requirement.
- Not disclosing the TID charge as its own line item. Chicago's ordinance specifically requires the 1.5% charge, if passed to the guest, to be shown separately with its own labeled receipt line.
- Not retraining front desk staff after a new district charge. Downtown Chicago properties need staff aware of the new May 2026 surcharge, not quoting the old total.
Where A PMS Fits Into TOT Compliance
None of the above is about software. It's about an Illinois property applying the state's 94%-of-receipts formula correctly, knowing whether it falls inside Chicago's new district zone, and, in Rosemont's case, taxing long stays rather than exempting them. Where a PMS actually helps is in keeping the state, local, and any district charge configured as distinct tax codes, and pulling revenue reports by date range for whichever filing cadence, including Chicago's unusual monthly-pay, annual-file structure, applies. roommaster lets properties configure tax codes per rate, so a new district charge like Chicago's is a configuration update once, not a manual recalculation on every folio.
See how roommaster simplifies multi-property tax reporting.
Frequently Asked Questions
1. Does Illinois have a statewide hotel tax rate?
Illinois has a state Hotel Operators' Occupation Tax of 6%, calculated on 94% of gross receipts for an effective rate near 5.64%, but cities add their own local tax on top, so the combined total varies significantly.
2. What is Illinois's hotel tax?
Illinois's hotel tax is the Hotel Operators' Occupation Tax at the state level, combined with a separately named local tax, like Chicago's Hotel Accommodations Tax, set by each city.
3. What is Illinois's lodging tax?
Lodging tax is the same general charge as Illinois's Hotel Operators' Occupation Tax, just a different common name for it, not a separate statewide figure.
4. Why is Chicago's hotel tax rate so high?
Chicago created its first Tourism Improvement District in 2026, adding a 1.5% charge on top of its existing city tax for larger downtown hotels, pushing the composite rate to roughly 19%, among the highest of any major U.S. city.
5. Do Illinois voters have to approve hotel tax increases?
No. Home-rule city councils and county boards can impose or raise a hotel tax by ordinance alone, no public referendum is required.
6. Does Illinois require hotels to disclose the total price before booking?
Not generally. Chicago's new Tourism Improvement District charge has its own narrow disclosure rule if passed to the guest, but there's no broader state or city all-in pricing law.
7. Who is responsible for collecting and remitting Illinois's hotel tax?
The property collects the state and local charges from the guest and remits them separately, with filing cadence varying by city, monthly for most, quarterly for some, and an unusual pay-monthly, file-annually structure for Chicago's new district charge.
