Waukegan Short-Term Rental Regulations

Sources verified 2026-07-22
TL;DR
Waukegan requires Residential Rental License ($60) with no primary-residence requirement. Combined tax rate is 12% (6% state + 6% city). No annual day limit.
Disclaimer
This information is provided for general informational purposes only and does not constitute legal, tax, or regulatory advice. Short-term rental regulations change frequently. Always verify current requirements with your local government before listing your property or making investment decisions.
Key Requirements at a Glance
Permit ✓ Required — Residential Rental License ($60)
Primary Residence ✗ Not required
Annual Day Limit No limit
Tax Rate 12% (6% state + 6% city)
Max Penalty No STR-specific maximum penalty is set; general municipal-code penalties apply under Waukegan Code Chapter 14.
Insurance Not required

New to short-term rentals? Jump to the compliance checklist →

Permit & Licensing

Residential Rental License

FeeAmount
Initial cost$60
Renewal$60 / 1 year

This permit type does not require primary residence.

Application Process

Apply online; requires pre-approval from the Planning & Zoning Department and passing a Building and Code Department inspection. A code officer contacts the applicant within 5 business days to schedule the inspection.

Tax Obligations

TaxRateAuthority
Illinois Hotel Operators' Occupation Tax (HOOT) 6% Illinois Department of Revenue
City of Waukegan Hotel/Motel/Short-Term Room Use Tax 6% City of Waukegan

Combined rate: 12% of gross rental income.

Collection: Operators self-remit HOOT to IDOR via Form RHM-1; effective July 1, 2025 hosting platforms for STRs are subject to HOOT as re-renters of hotel rooms. The City of Waukegan room-use tax is filed with and paid directly to the City.

Filing: File Form RHM-1 with IDOR; monthly by default (or quarterly/annually if IDOR notifies otherwise).

Rental Limits

Waukegan does not impose an annual cap on the number of nights you can rent.

Zoning & Restrictions

Check with local government

Insurance & Safety

Insurance

Waukegan does not require short-term rental operators to carry specific insurance. Standard homeowner policies often exclude short-term rental activity, so many hosts obtain dedicated short-term rental or landlord liability coverage.

Penalties for Non-Compliance

No short-term-rental-specific penalty schedule. Operating a rental without the required license is a violation of the Waukegan Code of Ordinances (general license/penalty provisions, Chapter 14).

Platform Requirements

Effective July 1, 2025, hosting platforms for short-term rentals are subject to the Illinois Hotel Operators' Occupation Tax if they meet the definition of re-renters of hotel rooms (Public Act 104-0006).

Market Snapshot

Demand context for Waukegan from official government and tourism statistics — the latest published annual figures, not a projection of rental income.

MetricValueSource
Population (2025 est.) 87,940 (-1.3% since 2020) U.S. Census Bureau

Figures are the latest annual statistics published by the linked official sources (retrieved 2026-07-13). Visitor counts cover the geography stated by each source, which can be wider than the city itself. Regulations above — not market conditions — determine whether and how you may operate.

Compliance Checklist

Follow these steps to legally operate a short-term rental in Waukegan:

  1. Apply for Residential Rental License. Submit application + $60 fee.
  2. Register for tax accounts. Set up lodging tax accounts with Illinois Department of Revenue. Register separately with the local city and/or county for their lodging taxes (self-administered — not collected by the state).
  3. Collect and remit taxes. 12% on all bookings.
  4. Renew annually. $60 renewal fee.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Waukegan?
Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Waukegan requires a Residential Rental License.
How much does a short-term rental permit cost in Waukegan?
A Residential Rental License in Waukegan costs $60 per year.
Does Waukegan require a short-term rental to be your primary residence?
No. Waukegan allows non-owner-occupied short-term rentals, so investment properties can qualify provided you hold the required permit.
How many days a year can you short-term rent in Waukegan?
Waukegan does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.
What taxes do you pay on a short-term rental in Waukegan?
Short-term rental stays in Waukegan are subject to a combined 12% in lodging taxes. This combines 6% Illinois Hotel Operators' Occupation Tax (HOOT) + 6% City of Waukegan Hotel/Motel/Short-Term Room Use Tax. Hosts are legally responsible; many booking platforms collect and remit them automatically on the host's behalf.
What are the penalties for short-term rental violations in Waukegan?
No short-term-rental-specific penalty schedule.

Official Sources

  1. Rental License — City of Waukegan (Planning & Zoning / Building & Code Dept.); STR falls under general rental licensing, no dedicated STR ordinance
  2. Waukegan Code of Ordinances, Chapter 14 — Licenses, Miscellaneous Business Regulations (rental license legal text; no STR-specific article)
  3. Illinois Hotel Operators' Occupation Tax — Illinois Department of Revenue (applies to short-term rentals; hosting platforms taxable eff. July 1, 2025)
  4. City of Waukegan Hotel-Motel-Short-Term Room Use Tax (6%, Ordinance 81-O-135)