Maria Gordon

CPA | Tax Manager

Beginning January 1, 2026, the rate for the Chicago Personal Property Lease Transaction rate increased from 11% to 15%. This change applies to invoices for all leases, including non-possessory leases for computers to manipulate data supplied by customers. The tax impacts businesses and individuals within the City of Chicago who are leasing personal property used in Chicago.

Understanding how this tax works and whether or not it applies to you is important to avoid compliance issues and unexpected costs.

Who Is Affected by the 2026 Tax Rate Increase?

This tax rate increase may impact you if:

• Your business leases personal property to customers located in the City of Chicago
• Your business provides non-possessory computer programs, such as SaaS or PaaS, to customers within the City of Chicago

Unless your customer qualifies as an exempt lessee, you must ensure the tax is calculated, charged and remitted at the new rate beginning January 1, 2026.

Other Chicago Tax Rate Changes Taking Effect in 2026

As part of its 2026 budget the City of Chicago approved additional tax changes, including: 

• A 15-cent tax per grocery bag 
• A 10.25% tax on sports betting revenue

These changes may affect both businesses and consumers.

Where to Find Official Information

The City of Chicago has published more details about all 2026 tax rate changes, including the Personal Property Lease Transaction Tax on its website.

Need Help Understand How This Affects Your Business?

Chicago tax rules, especially those involving leased property and software, can be complex. If you are concerned about these tax increases, unsure how they impact your business or how to properly calculate them, the tax team at Cray Kaiser is here to help. Contact us to ensure your business remains compliant and is prepared for the 2026 Chicago tax changes.