Chicago Rental Tax Increase 2026: What Event Rental Businesses and Clients Need to Know

Starting January 1, 2026, the City of Chicago significantly increased its Personal Property Lease Transaction Tax (PPLT) from 11 % to 15 % of the lease or rental price for most personal property leases. This change was adopted as part of the 2026 Revenue Ordinance passed by the Chicago City Council, and it affects virtually all businesses and individuals that lease or rent property within city limits. (City of Chicago)

What the Tax Change Is

Personal Property Lease Transaction Tax (PPLT) is a local tax that applies when personal property is leased or rented for use in the City of Chicago. Effective January 1, 2026, the rate increased to 15 % of the lease or rental price from the previous 11 %. (City of Chicago)

This tax applies broadly to leases of personal property—ranging from vehicles to equipment and other tangible property used by businesses and consumers, including many types of rental agreements. (City of Chicago)

Why the Tax Went Up

The increase was included in the 2026 Revenue Ordinance, passed by the City Council and implemented at the start of 2026. The city implemented multiple tax and fee changes as part of its efforts to balance the budget and address long-term financial needs. (City of Chicago)

Chicago’s fiscal challenges have been well documented: with high pension costs, structural budget gaps, and rising expenses, city leaders have turned to tax adjustments as part of their revenue strategy. (WTTW News)

Who Must Pay the Higher Tax

The higher 15 % PPLT applies broadly to any lease or rental of personal property in Chicago, including:

• Rental equipment and furniture used at events, meetings, and trade shows.
• Tool and machinery rentals for construction or production.
• Motor vehicles and transportation equipment leased or rented commercially.
• Business property leases that use leased equipment or assets in operations. (City of Chicago)

In other words, both businesses and individuals who rent or lease personal property for use in the city may see higher taxes reflected in invoices or rental charges.

How This Affects Event Rentals and Related Businesses

For companies in the event rental industry—like furniture, staging, scenic elements, AV equipment, and other leased goods—the 15 % tax increase can significantly impact pricing and cost planning:

Increased Cost of Rentals

• Vendors must collect the 15 % PPLT on the rental price of leased equipment and furniture used within Chicago.
• Event organizers may see higher line-item taxes on quotes and invoices as a direct result of this change.

Budgeting Considerations

• Planners and exhibitors should factor the new 15 % rate into estimates for Chicago-based events.
• Budget allocations for rentals at trade shows, corporate meetings, and conventions may need to be revised to reflect these higher municipal tax costs.

Pass-Through to Customers

• Many vendors will pass the tax through to the event host or end customer, meaning clients may pay higher overall rental charges due to the increased tax component.

What Businesses Should Do Now

1. Review Your Lease Agreements

Ensure contracts reflect the new PPLT rate and that billing systems calculate the 15 % tax correctly for transactions occurring on or after January 1, 2026.

2. Adjust Pricing and Quotes

Update rental quotes to incorporate the new tax, including any estimates presented to customers planning events in Chicago.

3. Communicate with Clients

Be transparent with clients about the tax change and how it affects total rental costs—especially for large corporate or nationwide events that include Chicago venues.

4. Monitor Other Local Tax Shifts

The 2026 Revenue Ordinance also brought changes to other local taxes and fees; it’s wise for businesses to stay informed across the full tax landscape. (City of Chicago)

Why It Matters

Taxes like the PPLT are not just bookkeeping entries—they influence operational costs and pricing decisions for every business that leases property in Chicago. For the events and rental industry in particular, this increase underscores the importance of strategic budgeting and pricing transparency for clients and partners.

Staying ahead of these changes helps event professionals and vendors avoid surprises, build accurate budgets, and deliver successful programs in one of the most active event markets in the U.S.

Frequently Asked Questions: Chicago Rental Tax Increase (2026)

What is the Chicago rental tax?

The Chicago rental tax, formally known as the Personal Property Lease Transaction Tax (PPLT), is a city tax applied to the lease or rental of personal property used within Chicago.

What is changing with the Chicago rental tax in 2026?

Effective January 1, 2026, Chicago increased the Personal Property Lease Transaction Tax rate from 11% to 15%. This higher rate applies to most rental and lease transactions occurring on or after that date.

Who does the 15% Chicago rental tax apply to?

The tax applies to any business or individual leasing personal property for use in Chicago, including equipment, furniture, staging, event rentals, tools, and other tangible assets.

Does the tax apply if the rental company is located outside Chicago?

Yes. If the rented property is used within Chicago city limits, the tax applies regardless of where the rental company is based.

How does the increased rental tax affect event rentals in Chicago?

Event organizers may see higher total rental costs, as the increased 15% tax is typically passed through on invoices. This impacts furniture rentals, staging, scenic elements, and other leased event equipment used in Chicago venues.

Is the Chicago rental tax charged on delivery or labor?

The tax generally applies to the rental charge for the personal property itself. Delivery, labor, and installation charges may be treated differently depending on how they are itemized and structured on an invoice.

Can rental companies absorb the tax increase instead of passing it on?

Some companies may choose to absorb part of the tax, but in most cases the tax is passed through to the customer, as it is a government-imposed transaction tax collected on behalf of the City of Chicago.

How should businesses prepare for the 2026 rental tax increase?

Businesses should:

• Update billing systems to reflect the 15% rate
• Adjust quotes and budgets for Chicago-based projects
• Communicate clearly with clients about the tax change
• Review contracts for tax language and compliance

Does this tax apply to long-term leases?

Yes. The Personal Property Lease Transaction Tax applies to both short-term rentals and long-term leases, with the tax calculated based on the applicable lease payments.

Where can businesses find official information about the tax increase?

Official details are published by the City of Chicago Department of Finance, including guidance on effective dates, rates, and compliance requirements.