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Airbnb to Collect Illinois Hotel Taxes, January 2016

  • Dec 22, 2015 | Gail Cole

 Have an Airbnb property in Illinois? New taxes take effect January 15, 2016.

Airbnb will collect the same 11.9% Illinois state tax that hotels collect and remit, beginning January 15, 2016. The company has been collecting the local Chicago hotel tax (4.5%) since February 2015.

Accommodations booked through Airbnb have always been subject to applicable state and local taxes. However, the company initially put the onus to collect on hosts. Without access to booking information, state and local governments have found this new lodging tax compliance challenging to enforce.

Under the new policy, Airbnb will automatically process applicable state and local taxes in Illinois. According to a company blog post, “We’re happy to be taking this important step that helps our host community and makes Illinois stronger.”

Come mid-January, Airbnb properties in Chicago will be taxed at a rate of 16.4%, just like Chicago hotels.

A few months later, on May 1, the rate for hotels will increase to 17.4% due to Cook County’s recently approved 1% hotel assessment. According to Crain’s Chicago Business, Airbnb has not yet indicated whether or not it will collect that additional tax.

Have a home vacation rental? Simplify your lodging tax compliance.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.