SB1749 creates the Short-Term Rental Occupation Tax Act and establishes a new state tax framework for short-term rentals in Illinois. The bill imposes two state-level taxes on short-term rental transactions facilitated by a hosting platform: a 5% tax and an additional 1% tax, each calculated on 94% of gross rental receipts. It defines short-term rentals broadly to include owner-occupied, tenant-occupied, and non-owner-occupied dwellings rented for less than 30 consecutive days, while excluding certain facilities such as schools, licensed care facilities, some senior housing, migrant housing, nonprofit patient housing, and hotels.
The bill also requires short-term rental operators to obtain a business license from the Department of Revenue and requires hosting platforms to register with the Department, collect and remit the tax, maintain records, and file monthly reports. Platforms would have to verify that listings are lawfully registered or permitted under applicable law, keep detailed transaction records, and provide information to the Department and, in some cases, local governments. The bill includes penalties for noncompliance, including fines, suspension or revocation of registration, and felony penalties for certain willful violations or fraudulent conduct.
In addition to creating the new act, SB1749 amends the Hotel Operators' Occupation Tax Act, the Counties Code, and the Illinois Municipal Code to align existing hotel tax provisions with the new short-term rental tax structure. It expands local taxing authority so counties and municipalities may apply hotel-style occupation taxes to short-term rentals as well as hotels, and it makes conforming changes to collection, remittance, and enforcement provisions. The bill is effective January 1, 2026.
The overall policy effect is to bring short-term rental platforms and operators into a more formal tax and licensing regime similar to that already applied to hotels. It would likely increase state and local revenue collection from short-term rental activity, while also giving the Department of Revenue and local governments greater oversight of listings, compliance, and enforcement. The bill also preserves some exemptions, including for charitable or religious use and certain long-term or specialized housing arrangements.
Because there are no committee transcripts or recorded votes in the provided material, there is no documented public debate or vote history to gauge sentiment. Based on the bill text alone, the measure appears designed as a revenue and regulatory bill, with a strong compliance and enforcement component. The main points of potential contention are likely to be the new tax burden on short-term rental hosts and platforms, the reporting and disclosure requirements, the licensing mandate, and the felony-level penalties for violations. Support would likely come from proponents of tax parity with hotels and stronger regulation of the short-term rental market, while opposition would likely come from short-term rental operators, hosting platforms, and others concerned about administrative burden and market impact.
SB1749 would create a new state tax on short-term rental transactions and require short-term rental operators to obtain a business license from the Department of Revenue. It would also impose registration, collection, reporting, and recordkeeping duties on hosting platforms, authorize the Department to enforce compliance, and add criminal and civil penalties for violations. The bill amends the Counties Code and Illinois Municipal Code so counties and municipalities can apply existing hotel-style occupation tax structures to short-term rentals, making short-term rentals subject to a tax and regulatory framework similar to hotels.
No committee transcripts or vote history were provided, so there is no recorded legislative debate or roll-call evidence to measure support or opposition. From the bill text, the measure appears to reflect a policy preference for taxing and regulating short-term rentals more like hotels, suggesting support from revenue-focused and local-government interests. At the same time, the detailed compliance obligations and penalties suggest the bill could draw concern from short-term rental hosts and hosting platforms.
The likely points of contention are the new 6% combined state tax burden on short-term rental transactions, the requirement that hosting platforms register with the Department of Revenue and disclose detailed booking information, and the mandate that operators obtain and display a state business license. The bill’s enforcement provisions are also notable, including fines, suspension or revocation of platform registration, and felony penalties for certain failures to file, keep records, or remit taxes. Supporters would likely emphasize tax parity with hotels, local oversight, and revenue collection, while opponents would likely focus on privacy, administrative burden, and the impact on the short-term rental market.