Chicago, Illinois Sales Tax Guide for SaaS and E-Commerce Businesses 2025

Chicago is one of the few cities in the United States that directly taxes SaaS and cloud software.
If your business sells software, online tools, or digital access to customers in Chicago, you may owe the city’s 9% Personal Property Lease Transaction Tax (PPLTT).

This guide explains how the Chicago PPLTT works for SaaS and e-commerce companies, who must register, how to calculate the tax, and where to file.

Last updated: October 2025

---

Quick Answer

• Chicago taxes SaaS and cloud software under its Personal Property Lease Transaction Tax (PPLTT) at 9%
• Illinois does not tax SaaS at the state level, but Chicago does if the user is located in the city
• Remote sellers can trigger economic nexus based on sales to Chicago customers
• Businesses must register separately with the City of Chicago Department of Finance to collect and file

---

Step-by-Step: How to Register and Collect Chicago SaaS Tax

1. Confirm nexus

   • Register for Illinois sales tax if your total Illinois sales exceed 100,000 dollars or 200 transactions in a year
     (Illinois Department of Revenue: Sales Tax Guide)
   • You may also have Chicago economic nexus if you provide SaaS or non-possessory computer leases to customers in the city
     (City of Chicago: Nonpossessory Computer Leases Bulletin PDF)

2. Determine taxability

   • Illinois generally exempts SaaS from state sales tax
   • Chicago treats SaaS, software access, and digital platforms as leases of tangible property under the PPLTT
     (Anrok: Chicago SaaS Tax Guide)

3. Register for Chicago PPLTT

   • Register with the City of Chicago Department of Finance to obtain a local PPLTT account
     (City of Chicago Department of Finance: Business Tax Division)
   • This registration is separate from your Illinois Department of Revenue account

4. Start collecting

   • Charge the 9% PPLTT to customers located in Chicago
   • File and remit through the city’s finance portal on a monthly or quarterly schedule

---

---

Chicago SaaS Sales Tax Quick Reference 2025

---

How the Chicago PPLTT Works for SaaS and Software

The Chicago Personal Property Lease Transaction Tax is a local tax on the lease or use of tangible personal property within city limits.
The city defines remote access to software and SaaS platforms as non-possessory computer leases that are taxable at 9%.
(Official City Bulletin: Nonpossessory Computer Leases)

For SaaS and e-commerce sellers:

• The tax applies based on where the customer uses the software, not where the business or server is located
• The 9% rate applies to the gross receipts from Chicago customers
• Remote SaaS providers may have to register if they meet the city’s economic nexus standard introduced in 2021
  (BDO: Chicago Lease Tax Nexus Update)

---

What Is Taxable in Chicago

---

Filing and Due Dates

• File PPLTT returns directly with the City of Chicago Department of Finance
• The city assigns monthly or quarterly filing frequencies based on activity level
• Keep separate filings for Illinois state sales tax and Chicago PPLTT
• File online through the Department of Finance portal
  https://www.chicago.gov/city/en/depts/fin.html

---

FAQs: Chicago Sales Tax on SaaS and Digital Products

Is SaaS taxable in Chicago

• Yes. Chicago taxes SaaS, software subscriptions, and cloud-based tools under the 9% PPLTT.

Does Chicago have economic nexus

• Yes. Since 2021, Chicago applies economic nexus standards to remote SaaS sellers with users in the city.

Do I need a Chicago account if I already collect Illinois sales tax

• Yes. Chicago requires a separate registration and filing under the PPLTT.

Where do I register

• Register through the City of Chicago Department of Finance at chicago.gov/fin.

---

Official Chicago Resources

• City of Chicago Personal Property Lease Transaction Tax (PPLTT)
• Nonpossessory Computer Leases Information Bulletin PDF
• Chicago Department of Finance Business Tax Division
• Illinois Department of Revenue Sales and Use Tax Guide
• BDO Chicago Lease Tax Rate and Nexus Update