Illinois ~ Sales and Use Tax: Chicago to Tax Rentals of Shared Housing Units

CCH Tax Day Report

The city of Chicago will impose a 4% surcharge on sales of hotel accommodations at “vacation rentals” and “shared housing units” and also impose the current 4.5% gross rental or leasing charge on “shared housing units,” effective July 1, 2016. This surcharge will be imposed in addition to the current 4.5% gross rental or leasing charge. The new surcharge will not apply to:

an accommodation a lessee or tenant occupies a his or her domicile or permanent residence;

temporary accommodations in nonprofit medical institutions, hospitals, or accredited medical education institutions; or

rooms rented by a bed-and-breakfast.

“Shared housing” will mean a dwelling unit containing 6 or fewer sleeping rooms any portion of which is rented, for transient occupancy by guests, but will not include:

single-room occupancy buildings;

hotels;

corporate housing;

bed-and-breakfast establishments,

guest suites; or

vacation rentals.

“Vacation rental” will mean a dwelling unit that contains 6 or fewer sleeping rooms that are available for rent or for hire for transient occupancy by guests.

The Chicago Department of Finance issued a news release about the new surcharge which was previously reported. (TAXDAY, 06/28/2016, S.3)

Subscribers can view amendments made to the tax ordinance.

Chicago_O2016-5111

Chicago Ordinance O2016-5111, Chicago City Council, June 24, 2016

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