Chicago is now home to the nation’s highest hotel tax after the City Council unanimously voted on Wednesday to create a Tourism Improvement District and raise the tax on hotel rooms within that district to 19%.
According to the Chicago Sun-Times, the current combined city, county and state tax on hotel rooms is 17.5%. Advocates for the tax hike expect it to generate more than $50 million a year, which will be used to market the city as a travel destination for conventions and tourists.
The tax increase applies to room rates at hotels with 100 or more rooms. Hotels in all or part of 14 different wards — including the tourist-heavy Downtown, McCormick Place, the Illinois Medical District and Hyde Park — will impose the increase for the next five years.
Kristen Reynolds, CEO of Choose Chicago, the city’s official destination marketing organization, advocated for the tax increase by observing that other cities “know very well that Chicago is underfunded, and they use it to their advantage” for gaining conventions and major events. Mayor Brandon Johnson also approved the tax hike by stating it will be used in “combating the negative narratives that surround our city” while providing Choose Chicago with the “bid fees to compete for large events.”
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