Planes, trains and automobiles: Chicago’s high travel taxes

Chicago has some of the highest taxes on travelers in the nation.

Chicago is a major travel destination for businesses and tourists alike, offering countless attractions, a variety of accommodations, and numerous entertainment offerings.

But all that comes with a price.

Chicago has some of the highest taxes on travelers in the nation. Whether it’s fees on transportation, steep taxes on lodging, or brazen shakedowns of entertainment and dining venues, local politicians find a way to get their slice.

Take, for example, Chicago’s tax on hotels. Chicago hotel guests pay a combined 17.4 percent tax on their rooms. This includes a 6 percent state tax on lodging, a 1 percent Cook County hotel tax, and additional taxes levied by the city of Chicago, the Illinois Sports Facilities Authority and the Metropolitan Pier and Exposition Authority, or MPEA.

The hike to a 17.4 percent combined rate stems from a 1 percent hotel tax that Cook County implemented in 2016, which drove up the rate from the previous 16.4 percent level. But even before the hotel tax hike in 2016, Chicago’s tax rate on lodging was one of the most expensive in the country. Chicago’s previous combined lodging tax rate was ranked 21st-most-expensive out of the top 150 urban centers in the nation, according to a report by HVS Convention, Sports, & Entertainment Consulting.

Taxing hotels is a politically savvy move. By pushing some of the tax burden onto visitors, who are likeliest to rely on services such as hotels and airport transportation, Chicago and Cook County politicians can increase revenue without having to spend political capital taxing voters.

And after the defeat of Cook County’s sweetened beverage tax in October, local politicians know they can’t simply pass any tax they want. Especially one that hurts their voters. This partly explains the increasingly higher tax burden on travelers in Chicago.

City politicians have multiple ways to squeeze visitors trying to get around the city. Those departing from one of Chicago’s commercial airports are subject to the MPEA Airport Departure Tax, which applies to businesses that use taxis, buses and vans to provide transportation services for departing passengers. The tax ranges from $4 per taxi to $54 for vans and buses that can carry 25 passengers or more. This tax ultimately is passed down to consumers who have to pay up if they want a ride to the airport.

And for those who opt for Uber or Lyft to get around, Chicago charges a 52-cent fee on ridesharing services. And that number could go up, as some officials have supported nearly doubling that fee to $1, and raising it even higher in certain parts of the city.

Car rentals aren’t left out either. The state, the city and the MPEA tax rented cars, vans and RVs. Illinois charges a 5 percent automobile rental tax, MPEA charges 6 percent, and Chicago charges $2.75 per rental period on top of the city’s 9 percent personal property lease transaction tax.

For those looking to sail into Chicago, the city has that covered, too. Chicago levies a 7 percent boat mooring tax
on any vessel that uses a dock within the city.

And visitors interested in checking out Chicago’s world-renowned restaurants can expect higher prices as well. As part of his proposed 2018 budget Chicago Mayor Rahm Emanuel wants to raise permitting fees up to $1,650 from $1,000 for establishments greater than 10,000 square feet – which ultimately costs both restaurateurs and diners.

Concertgoers and musical aficionados should brace themselves: Local politicians have taxed entertainment, and that promises to continue. Currently, Chicago charges a 5 percent amusement tax on top of Cook County’s amusement tax, which ranges from 1 percent to 1.5 percent, depending on the size of the venue, for a combined amusement tax rate of 6 or 6.5 percent.

But this may go up even more.

As part of his 2018 budget, Emanuel plans to increase the city’s amusement tax. Dubbed the “Hamilton tax,” the increased tax of 9 percent would apply to tickets to music and theater events in venues with 1,500 seats or more.

As the holidays commence and thousands rush to the Windy City to see friends and family or to catch dinner and a show, visitors to Chicago should get ready to feel the pinch. It’s that way by design.