Does Chicago have an income tax?

Chicago does not impose a separate city-level corporate or business income tax. However, businesses operating in Chicago remain subject to various state and federal taxes, and some local fees might apply depending on the specific business entity type.

1. Illinois State Corporate Income Tax

Businesses in Chicago must pay:

  • Illinois Corporate Income Tax: 7.00% (flat rate)
  • Personal Property Replacement Tax (PPRT): 1.5% for corporations
    → Combined effective state-level tax rate: 8.5%

2. Federal Corporate Income Tax

  • U.S. federal corporate income tax rate: 21% (as of 2025)

3. Local Taxes in Chicago (Non-Income)

While there is no local income tax, Chicago imposes various business-related taxes and fees, such as:

  • Chicago Business License Fees
  • Amusement Tax (for entertainment services)
  • Hotel Accommodations Tax
  • Restaurant and Beverage Taxes
  • Use Tax and Lease Tax on certain goods and services

Chicago does not have a separate city corporate income tax. Businesses must comply with federal and Illinois state corporate tax, plus city-level operational taxes and fees, depending on the business sector.

Related FAQs

1. What is business excise tax in Washington State?2. How to file Washington state business taxes?3. What kind of corporation tax does Florida have?4. When are Delaware LLC annual reports due?5. What items are exempt from sales tax in Nevada?

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