Overview: Software as a Service and its Taxability in the City of Chicago
As software has continued to develop over time, Chicago has taxed virtually all software used as a service (“SaaS”), including subscriptions and online versions, as well as cloud computing services provided to users located within the city. Although Illinois does not tax many subscriptions, online, or cloud-based products, Chicago applies a personal property lease transaction tax (“PPLTT”) to purchases of software and cloud-based products not taxed at the state level to a 9% lease tax rate.
SaaS-type services go by many names, including platform, desktop, and information as a service. Software use is deemed to occur at the location where the service is accessed. Therefore, the PPLT applies to all charges for software accessed as a service in Chicago.
In this guide, members of our tax team discuss Chicago personal property lease transaction tax refund opportunities.
- Software as a Service and its Taxability in the City of Chicago
- Potential Refund Opportunities: Employee Location
- Industries of Interest: Red Flags
- Next Steps: We are Here to Help
For more information contact our accredited tax team members:
Roger Schweikert
Tax Director
rschweikert@pkfmueller.com
+1 708 745 3515
Karen Boyaris
State & Local Tax Director
kboyaris@pkfmueller.com
+1 847 783 1921
