May 18, 2026
by Mahnoor Ashraf
Executive Summary
The 2026 edition of this annual report lists and describes selected consumer taxes within the City of Chicago (Chicago or the ‘City’), effective as of January 1, 2026. Consumer taxes are taxes imposed on the purchase, use, or consumption of goods and services by individuals and businesses. They are generally paid by the end user, either at the point of sale or through charges embedded in the price of a good or service, and include both broad-based sales taxes and targeted excise taxes on specific products or activities. 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.
While not exhaustive, this report is intended to be a comprehensive compilation of taxes paid by consumers within the City of Chicago at all levels of government: federal, state, and local.
How this Report is Organized
The taxes in this report are grouped and presented under the following broader categories:
- Sales taxes;
- Tobacco and nicotine-related taxes;
- Cannabis taxes;
- Beverage taxes;
- Utility taxes;
- Accommodations 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 instead are grouped together by category for ease of use by the public.
About the Tax Categorizations in This Report
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 (RTA), Metropolitan Pier and Exposition Authority (MPEA), and Illinois Sports Facilities Authority (ISFA). The summary table below shows the taxes imposed at each of these individual levels, as well as the total composite tax, which is the sum of all applicable taxes combined.
Taxes imposed by Cook County and the City of Chicago are organized into two sub-categories:
- Cook County:
- County
- Home Rule
- City of Chicago:
- Municipal
- Home Rule
These are differentiated due to the taxing authority through which the county and city can impose certain taxes. The County and Municipal designations are taxing authority granted by the State of Illinois to all municipalities or counties. For example, the State authorizes counties and municipalities to impose taxes on recreational cannabis up to a 3% cap. Both Cook County and the City of Chicago apply this 3% tax.
Taxes categorized as County and Municipal 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%, 5.0% of which goes to the State, 1.0% goes to all Illinois 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 governments to impose taxes not otherwise prohibited by the Constitution or state statutes. Both Cook County and the City of Chicago are home rule units of government. Article VII, Section 6 of the Illinois Constitution designates as a home rule government any municipality with a population over 25,000, any municipality that has adopted home rule by referendum, and a county with a chief executive officer. Cook County is the only county in Illinois that has home rule status.
Many of Chicago and Cook County’s consumer taxes are levied through their home rule authority, such as taxes on cigarettes, liquor, soft drinks, motor fuel, and parking garages.