Chicago is where Illinois tax questions get more complicated. The city levies its own long list of taxes, property in the city is assessed and billed through Cook County, and employers face a city paid leave ordinance that sits alongside the state law. Our firm is based in Naperville, west of the city, and we work with Chicago residents and businesses by appointment in Naperville or fully online. This page explains the Chicago-specific rules that matter.
Chicago's own taxes
The Department of Finance lists the taxes it administers. Some affect nearly every business that sells to the public or rents property; others are narrow. Highlights include:
| Tax | Who it reaches, in summary |
|---|---|
| Restaurant tax | All places for eating |
| Amusement tax | Venue owners and operators, ticket resellers, certain sports wagering licensees and social media businesses |
| Hotel accommodations tax and shared housing surcharge | Businesses that rent hotel rooms, vacation rentals and shared housing |
| Personal property lease transaction tax | Lessors or lessees of personal property used in Chicago |
| Real property transfer tax | Transfers of title or beneficial interest in Chicago real property |
| Parking tax and ground transportation tax | Parking operators and for-hire vehicle providers |
| Use tax on titled or non-titled property | Purchases made outside Chicago for use in the city |
| Checkout bag tax, bottled water tax, tire fee | Retail sales of those items |
The list also includes liquor, cigarette, utility, telecommunications and fuel taxes. The Department says the current ordinances and rulings take precedence over its summaries. For sales tax, the State rate on general merchandise is 6.25 percent, and the Tax Rate Finder on MyTax Illinois is the way to confirm the rate for an address and period; we do not quote a combined rate here. See restaurants and retail, real estate investors and our sales and use tax service.
Cook County property tax
Chicago property is assessed by the Cook County Assessor, appealed first to the Assessor and then, if you choose, to the separate Board of Review, and billed by the Cook County Treasurer. The Assessor reassesses on a triennial cycle, and typically you have about 30 days after receiving a reassessment notice to appeal. If you miss that window, you may appeal in a later year when your township is open. Once you have appealed your reassessment, you generally do not need to appeal every year unless the property changes significantly. On the Cook County Treasurer's due-dates page, installment dates have varied from year to year, so use the dates on your own bill. An appeal addresses the assessed value, not the tax rate. See our Cook County page and state and local tax deductions.
Chicago paid leave for employers
According to the City, the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance was passed on November 9, 2023 and took effect on July 1, 2024. It covers employees who work at least 80 hours within any 120-day period. Employees accrue one hour of paid leave for every 35 hours worked, up to 40 hours in a 12-month period, and a separate bank of paid sick leave. Employees must be allowed to use accrued paid leave, for any reason, no later than the 90th day of employment, and up to 16 hours can carry over if the employer does not front-load it. The City's Office of Labor Standards enforces the ordinance and publishes notices and rules that change over time, so employers should check those materials.
Illinois's Paid Leave for All Workers Act, in effect since January 1, 2024, does not apply to employers already covered by a municipal or county ordinance that requires paid leave, according to the Illinois Department of Labor, which names the Chicago ordinance and the Cook County ordinance as examples. Employers with staff in Chicago should also read our guide to local payroll taxes and consider payroll services.
Who lives and works in Chicago
The Census Bureau's American Community Survey (2020-2024 five-year estimates) counts about 2.71 million residents. About 21 percent were born outside the United States, and about 7 percent identify as Asian alone. About 47,000 people identify as Asian Indian alone and about 28,000 were born in India. Median household income is about $78,000, about 44 percent of adults hold a bachelor's degree or higher, and only about 46 percent of occupied homes are owner-occupied, so a majority of households rent. Education and health care leads employment at about 24 percent. About 21 percent work from home and about 8 percent are self-employed.
For landlords and freelancers, see rental property taxes and self-employed and freelancers. For Indian-American households, see the US-India tax treaty.
How we can help
We help Chicago restaurant, hotel, lease and entertainment owners identify which city taxes apply, prepare individual and business returns, keep books and review IRS notices. Start from the contact page.
Frequently asked questions
Does Chicago have a city income tax?
No. Income is taxed only by Illinois, at a flat 4.95 percent. Chicago's own taxes are on activities such as dining, lodging, entertainment, parking and leases. See our Illinois guide.
Do I appeal my Chicago property assessment to the City?
No. In Chicago the Cook County Assessor handles first-level appeals, and the Board of Review is a separate body. Both are county offices.
Does Chicago's paid leave ordinance apply to my business?
It applies to covered employees who work in Chicago. The City's Office of Labor Standards publishes notices and rules, and the state Act defers to the ordinance.
Official sources
- City of Chicago Department of Finance: Tax list
- City of Chicago: Paid leave and minimum wage press release
- Cook County Assessor: Overview of how appeals work
- Illinois Department of Labor: Paid Leave for All Workers Act FAQ
- U.S. Census Bureau: Chicago city, Illinois (American Community Survey 2020-2024)
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.