Chicago increases PPLTT rate to 15%, impacting SaaS and cloud providers
Chicago has approved a significant increase to its Personal Property Lease Transaction Tax. The PPLTT rate rises from 11% to 15%. SaaS companies and other digital service providers must update the rate they charge Chicago customers immediately to avoid under-collection.
Written by Alex Lamachenka
Head of DemandGen
Published
What changed
- Previous rate:
11% - New rate: 15%
- Tax type: Personal Property Lease Transaction Tax (PPLTT)
- Effective date: January 1, 2026
This follows an earlier increase from 9% to 11% that took effect January 1, 2025.
What is subject to Chicago’s PPLTT
Chicago applies the PPLTT to the lease or rental of personal property used in the city, including:
- Cloud computing services
- SaaS platforms
- Remotely accessed or hosted software
- Other leased digital property used by Chicago customers
Why Chicago impacts remote sellers
Chicago applies its PPLTT tax based on where the customer uses the service, not where the seller is located.
Because the city is a home-rule jurisdiction, it taxes software, SaaS, and cloud services under the Personal Property Lease Transaction Tax even when Illinois state sales tax does not apply.
As a result, sellers with Chicago-based customers can have city-level tax obligations on software digital services solely due to the customer’s location.
Who this affects
- SaaS and cloud service providers with Chicago-based customers
- Remote sellers delivering taxable digital services into Chicago
- Marketplace facilitators involved in taxable digital transactions
- Finance, tax, and engineering teams managing address-level tax calculation
Why this matters for sellers
The four-point rate increase creates immediate calculation risk. Sellers that fail to update city-level logic will under-collect beginning January 1, 2026. This risk is amplified for subscription billing, usage-based pricing, and contracts that span the year-end transition.
Next steps for sellers
- Calculation: Update systems to apply the 15% Chicago PPLTT rate for transactions occurring on or after January 1, 2026.
- Review: Identify customers with Chicago billing or usage locations.
- Billing: Confirm recurring invoices reflect the new rate beginning in 2026.
Other US Sales Tax Updates
Indiana expands 2026 tax amnesty program to cover additional tax periods
State tax amnesty programs offer a limited-time opportunity for taxpayers with unpaid liabilities to come forward and settle them with reduced penalties and interest. Indiana's tax amnesty program runs July 15 – September 15, 2026.
Nevada moves sales tax return deadline to the 20th starting in 2026
Nevada has updated its sales and use tax filing schedule. Beginning with the January 2026 reporting period, returns and payments are due on the 20th of the following month, replacing the previous end-of-month deadline. The first return affected by this change is due February 20, 2026.
City of Gunnison shifts sales tax collection to the state starting in 2026
Starting January 1, 2026, the City of Gunnison will stop self-collecting local sales tax and move to state-collected city sales tax through the Colorado Department of Revenue.