Hotel Operators' Occupation Tax

• MyTax Illinois

Hotel Operators’ Occupation Tax is imposed on the occupation of renting, leasing, or letting rooms to persons for living quarters for periods of less than 30 consecutive days.

Effective July 1, 2024, persons engaged in the business of re-renting hotel rooms (i.e., re-renters) are subject to Hotel Operators’ Occupation Tax on the receipts from those rentals. See Public Act 103-592.

“Re-renters of hotel rooms” are persons who are not employed by a hotel operator but who, either directly or indirectly, through agreements or arrangements with third parties collect or process the payment of rent from a guest of a hotel for a hotel room located in Illinois and either

• obtain the right or authority to grant control of, access to, or occupancy of a hotel room in Illinois to a guest of the hotel; or
• facilitate the booking of a hotel room located in Illinois.

Persons who obtain those rights or authorities are not considered re-renters of hotel rooms if they operate under a shared hotel brand with the operator.

Note: “Re-renters of hotel rooms” do not include hosting platforms for short-term rentals of owner-occupied, tenant-occupied, or non-owner-occupied dwellings.

The tax rates are available in the Tax Rate Database, under the Excise Tax Rates and Fees web page.

You may take the following deductions on Form RHM-1, Hotel Operators' Occupation Tax Return: 

• receipts from foreign diplomats (via federal treaty);
• receipts from rentals of meeting rooms, display rooms, sample rooms, offices, and private dining rooms;
• local taxes not collected by the Illinois Department of Revenue (IDOR);
• receipts from permanent guests (i.e., guests who occupy, or have the right to occupy, a room or rooms for at least 30 consecutive days); and
• for re-renters of hotel rooms, the cost of a room and any taxes paid to a hotel operator for the initial rental of the hotel room.

For more information, please review Publication 106, Allowable Deductions for IDOR-Collected Hotel Taxes. (Coming soon).

Effective July 1, 2023, qualifying entities providing disaster relief are exempt from paying Hotel Operators’ Occupation Tax on gross rental receipts for rooms (Public Act 103-9).

To qualify, such organizations must

• be organized and operated exclusively by an organization chartered by the United States Congress to provide disaster relief, and
• possess an active Illinois Exemption Identification Number issued by the Illinois Department of Revenue (IDOR).

The following local taxes are locally-imposed hotel taxes that the Illinois Department of Revenue (IDOR) collects. For hotel operators in Chicago, the rate on any preprinted Form RHM-1 return issued by IDOR includes these taxes. If you file electronically using MyTax Illinois, the rates will be populated for you according to each hotel’s registered location. 

• Illinois Sports Facilities Hotel Tax
• Metropolitan Pier and Exposition Authority Hotel Tax
• Municipal Hotel Tax (Chicago)

Note: Units of local government may impose taxes or fees, which IDOR does not collect. Contact your local government (i.e., county, municipal, or mass transit district) to determine if you must pay any additional taxes or fees not listed above.

Form RHM-1, Hotel Operators’ Occupation Tax Return, is filed monthly, quarterly, or annually, based on the taxpayer’s average monthly liability. IDOR determines how often a return must be filed.

A monthly return is due on or before the last day of the month following the month for which the return is filed.

A quarterly return is due on or before the last day of the month following the quarter for which the return is filed.

An annual return is due on or before January 31 of the year following the year for which the return is filed.

A taxpayer that had an annual liability of $20,000 or more in the preceding calendar year must remit any tax payment by using an electronic payment method.

• Form RHM-1, Hotel Operators' Occupation Tax Return | Instructions
• Form RHM-1-X, Hotel Operators' Occupation Tax Return | Instructions
• Form RHM-7, Hotel Operators' Occupation Tax Multi-Site Schedule | Instructions
• Hotel Operators' Occupation Tax Forms and Instructions
  
• FY 2024-01, Hotel Operators' Occupation Tax Exemption for Qualifying Organizations
• Public Act 103-9
• FY 2024-29, Hotel Operators’ Occupation Tax Updates for Operators and Re-Renters of Hotel Rooms
• Public Act 103-592
• Information for exclusively charitable, religious, or educational organizations; governmental bodies; and certain other tax-exempt organizations