July 11, 2023   //   Tax   //   By PKF Mueller Solutions


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

Download the full guide.

For more information contact our accredited tax team members:

Roger Schweikert
Tax Director
+1 708 745 3515

Karen Boyaris
State & Local Tax Director
+1 847 783 1921