Parking in a Chicago lot, garage, or valet service carries a 23.25% city parking tax, and that’s before Cook County and Illinois add their own. Stacked together, the three taxes come to 35.25% on daily or weekly parking and 41.25% on monthly parking. A $200 monthly garage spot works out to $282.50 once every layer is applied.
The City Rate
As of January 1, 2025, Chicago charges a flat 23.25% on all paid parking regardless of duration. Daily stays of 24 hours or less, weekly arrangements, and monthly contracts all carry the same rate, and weekend parking is taxed the same as weekday parking.1City of Chicago. Tax Rate Changes as of January 2025 The prior rate was 22%. When it rose in January 2025, existing monthly contracts were not grandfathered.2City of Chicago. Parking Tax
Valet is taxed at 23.25% too, but on a broader base. The tax applies to everything the valet business collects, including service fees. A $30 parking charge with a $5 service fee is taxed on the full $35.2City of Chicago. Parking Tax
County and State Add-Ons
Cook County imposes its own parking lot and garage operations tax: 6% on parking of 24 hours or less, 9% on weekly and monthly parking.3Cook County. Parking Lot and Garage Operation Tax The Illinois Parking Excise Tax, in effect since January 1, 2020, uses the same tiers: 6% on hourly, daily, or weekly parking; 9% on monthly or annual parking.4Illinois General Assembly. 35 ILCS 525 Parking Excise Tax Act
Add the layers together and drivers face:
- Daily or weekly parking: 23.25% + 6% + 6% = 35.25%
- Monthly parking: 23.25% + 9% + 9% = 41.25%
Each tax is remitted to its own authority. That’s why receipts often break the amounts out separately.
Who Has to Collect It
Under Chapter 4-236 of the Chicago Municipal Code, three kinds of businesses must collect the city tax and forward it to the city: parking lots, parking garages, and valet operators.2City of Chicago. Parking Tax A lot is any outdoor area where vehicles are stored for a fee. A garage is any building or structure used for the same purpose, enclosed or open-air. Valet services are covered whenever they charge for storage or related services. The operator is the collection agent, so the tax should appear as a line item on your receipt rather than folded silently into the base price.
The state’s Parking Excise Tax uses a similarly broad definition, covering any place where vehicles are parked for a fee, including areas where a valet parks the car on the customer’s behalf.4Illinois General Assembly. 35 ILCS 525 Parking Excise Tax Act
When You Don’t Owe the Tax
The main exemption is residential off-street parking. If you rent or own in Chicago and your building provides parking that the city’s zoning ordinance requires, the city tax doesn’t apply. The arrangement has to be documented, whether in the lease, a separate written agreement between landlord and tenant, or an agreement between a condo association and the unit owner or occupant.2City of Chicago. Parking Tax
The zoning-ordinance piece is where people trip up. If the parking spaces weren’t required by zoning, or if the arrangement isn’t in writing, the exemption may not apply. You can pay the landlord, the condo association, or the lot operator directly and still qualify, as long as the zoning and documentation requirements are met.5City of Chicago. Parking Lot and Garage Operations Tax Ruling 1
Government-operated lots and parking tied to the core mission of a charitable or religious organization are generally exempt as well. Hospital and medical facility parking is not. Patients and visitors at Chicago hospitals pay the full tax.
When the Price Includes All Taxes
Some operators quote one flat number with all taxes rolled in. To calculate what the tax actually is, the Illinois Department of Revenue says to divide the total by one plus the combined rate expressed as a decimal.6Illinois Department of Revenue. Parking Excise Tax FAQ
Say a lot charges $20 flat for a week and that includes everything. The combined weekly rate is 35.25%, or 0.3525. Divide $20 by 1.3525 and the base price is about $14.79. Each of the three taxes is then figured on that base.
Filing and Penalties for Operators
Operators file and pay the city parking tax through the Chicago Business Direct online portal, which replaced the older account-number-and-PIN system.7City of Chicago. Finance – Business Taxes Payment is due by the 15th of the month following collection: taxes collected in March are due April 15.8City of Chicago. Tax Division FAQs The state excise tax is filed separately through MyTax Illinois using Form PE-100, so records need to break out each layer.9Illinois Department of Revenue. Parking Excise Tax
Missing a city payment triggers a 5% late payment penalty plus 12% annual interest running from the day after the due date. Filing late carries a separate penalty: the greater of 1% of the total tax due (capped at $5,000) or 5% of the amount payable with the return. Both penalties can hit at the same time, with interest accruing daily on top.8City of Chicago. Tax Division FAQs An operator who never collects the tax from customers is still liable for the full amount, and repeat non-compliance can lead to administrative hearings and license revocation.