The new budget for Chicago is now in effect and while some tax changes won’t begin right away, others have already arrived.
Beginning at the start of the new year were things like a 15 cent tax per grocery bag at checkout and a 10.25% tax on sports betting revenue.
Starting next week, ride share customers will see an increased “congestion fee” if they’re picked up or dropped off in newly defined “congestion zones.”
And a new liquor tax will take effect starting in March. The tax was supposed to begin earlier, but was delayed to allow businesses time to adjust.
The budget began in Chicago after Mayor Brandon Johnson refused to sign it, but he also did not veto the alternative plan passed by City Council in late December. If no budget was passed by the end of the year, the city faced a potential shutdown.
“I want to announce I will not veto the budget approved by the Chicago City Council. I will not add my signature affirming the budget as presented,” the mayor said in a statement. “In this moment I will not add the risk and speculation of a government shutdown to the profound worries Chicagoans face.”
Without his signature, the budget took effect by default five business days from when it was passed, or by Jan. 1.
Here’s a look at the tax changes beginning in 2026 for the city:
Personal Property Lease Transaction Tax
• Beginning Jan. 1, a 15% tax will be applied to the lease or rental price for all leases in a personal property lease transaction.
Motor Vehicle Lessor Tax
• Those leasing motor vehicles within the city on a daily or weekly basis will see a $0.50 per vehicle per rental period tax.
Boat Mooring Tax
• There will be a 23.25% tax on mooring or docking fees, for not-for-profit corporations, however, it is 7%.
Checkout Bag Tax
• Beginning Jan. 1, the tax will sit at 15 cent per checkout bag sold or used in the city. Every store that remits or pays the tax is eligible to retain one cent per checkout bag sold or used. The previous bag tax was 10 cents per bag.
Ground Transportation Tax TNP Congestion Zones Surcharge
•Also known as a rideshare tax, this tax change begins on Jan. 6 and will charge the following, according to the city:
For every single ride, an additional $1.50 (up from $1.13) per vehicle per ride accepted for every such ride that includes a pickup or drop-off, or both, in a so-called “Congestion Zone”. This shall apply seven days a week from 6 a.m. to 10 p.m. For every shared ride, an additional 60 cents (up from 53 cents) per vehicle per ride accepted for every such ride that includes a pickup or drop-off, or both, in a newly defined “Congestion Zone”. This shall apply only on weekdays from 6 a.m. to 10 p.m.Social Media Amusement Tax
• The tax is imposed on social media businesses that collect consumer data on more than 100,000 Chicago consumers in a calendar year, based on the number of Chicago consumers from whom a social media platform business collects consumer data within a calendar month. Those businesses will now be charged $0.50 per the number of Chicago consumers per calendar month in excess of 100,000.
Internet and MobileSports Wagering Amusement Tax
• Primary sports licensees will be taxed 10.25% of the adjusted gross sports wagering receipts from sports wagers that are placed within the city, but there are some guidelines. The bets must be placed:
at, or within a five-block radius of a casino facility, racetrack facility, or sports facility where sports wagering is allowed. over the internet or through a mobile application placed within the city.Liquor Tax / Alcoholic Beverages Tax
• Beginning March 1, this tax will be applied on alcoholic beverages purchased at retailers for consumption off of the premises. It will be 1.5% of the purchase price.
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