Ukutholela ibhizinisi ilayisense e-Chicago

These information pages can help you get started in learning about some of the laws and registration requirements that may apply to your Experiences on Airbnb. These pages include summaries of some of the rules that may apply to different sorts of activities, and contain links to government resources that you may find helpful.

Please understand that these information pages are not comprehensive, and are not legal advice. If you are unsure about how local laws or this information may apply to you or your Experience, we encourage you to check with official sources or seek legal advice.

Please note that we don’t update this information in real time, so you should confirm that the laws or procedures have not changed recently.*

If I’m hosting an Experience in Chicago, am I operating a “business” in the eyes of the law?

If you expect to earn money or other economic benefits from hosting, then yes, you will be considered a business under Chicago’s regulations.

Are there registration requirements for businesses in Chicago?

Yes. In general, businesses operating in the Chicago require a City of Chicago Business license. The City’s Small Business Center offers a helpful guide to licensing requirements and exemptions.

Depending on the type of Experiences you are offering, you may need to take additional steps to obtain permits or required licenses. See the “Activities and Licenses” section below for more details.

How can I register as a business in Chicago?

The City of Chicago allows you to file your business license application in-person or online. To apply in-person, you can schedule an appointment with a Business Consultant by reaching out to the Chicago Small Business Contact Center at 312-74-GOBIZ (744-6249) or walk into the Small Business Center from 8:30am to 3:30pm Monday through Friday. The Small Business Center is located in City Hall, 121 North LaSalle Street, Room 800, Chicago, Illinois, 60602.

More details about scheduling an appointment with a Business Consultant can be found here.

In addition to submitting your application (and any supporting documents), you’ll need to pay an application fee. Application fees vary, but are generally $250. Business licenses in Chicago are good for two years.

Below are the steps to consider when registering for a license. This list is by no means exhaustive, so please review the License Application Requirements,contact a Small Business Center consultant, and/or speak to a lawyer to make sure you’ve met all of the requirements.

• Step 1: Choose your business structure. You’ll need to choose your preferred business structure. Go here to learn more about the different types of business structures - including Sole Proprietorship, Partnership, Corporation, and Limited Liability Company - and what these different types of business structures mean.

  Sole Proprietorships are the simplest way to start a new business if you’re the only business owner and person responsible for your business’s assets and liabilities. Other business structures typically require additional fees and filings with the Illinois Secretary of State, which are not required for Sole Proprietorships. See here for more information.

• Step 2: Choose your business name. You’ll also need to name your new business. Most Experience Hosts on Airbnb use their own name on their Listings (such as “John Smith”). If you plan on doing the same, you don’t need to fill out any additional forms.

  If you don’t want to use your own legal name for your business, you may create a “trade” or “dba” name (such as “John’s Lakefront Adventures”). First, you should check County and State records to make sure no one else is using the trade name. Sole Proprietors conducting business under a trade name in Cook County are required to file an Assumed Business Name Registration with the Cook County Clerk’s office. If you are operating your business as an LLC, corporation, or other legal entity and wish to use a trade name, you will need to file an Assumed Name Registration with the Illinois Secretary of State. See here for filing instructions for LLCs, and here for corporations.

• Step 3: Choose your business location. To register with the City, you’ll need to include the address where you run your business (i.e., a business address, shared workspace, or at home). Your business license application will be subject to a Zoning Review, which will consider compliance with the the City’s “Home Occupation” rules. In most cases, you will be allowed to run a business out of your own home in Chicago, so long as it doesn’t interfere with other residents of the neighborhood. See here for details about home-based businesses in Chicago, or consult with the City’s Small Business Center if you have questions.

• Step 4: File your application with the City. Before hosting your first Experience, you should submit your Business License Application to the City. Once your business license is on file, you are required to renew your license every two years. You should promptly notify the City if you move to a different location, or make other significant changes to your business.

  Example: Darryl hosts Experiences one weekend per month where he brings guests to his favorite jazz clubs in Chicago. He:

  • Picks a Sole Proprietorship structure;
  • Decides to use his own legal name to register as a business (that’s how he lists his Experience on Airbnb anyway);
  • Picks his own home as his business address;
  • Does not have any employees.

  Darryl pays a $250 application fee, and receives a City of Chicago Business License before he hosts his first Experience. Darryl will not owe any other fees or require any other licenses to start his business.

Is there anything else I should be thinking about?

Yes. You should consider the following:

Activities and Licenses

Depending on the activities involved in your Experience, you may need to file a registration, obtain a permit, or follow specific rules that apply to that activity. Information on some activities that may require specific permits can be found here and here.

In addition, our sections on some common activity-specific topics - like guiding tours, Food, and alcohol - provide additional information, but are not exhaustive. You should always check with the city or speak to a lawyer to determine which permits and licenses may be required for the Experience you are offering.

Employees

If you plan to hire employees as part of your business, you may also be required to obtain an employer identification number (EIN) from the IRS and register with the Illinois Department of Revenue. Sole proprietors without employees may use their Social Security Number instead of an EIN.

Tax and accounting

You should also check what tax and accounting rules apply to you. If you are operating as a Sole Proprietor, you will probably need to track and report your business income on your Illinois State Individual Income Tax return. If your Experience includes the sale of “tangible personal property,” you may also need to register and collect sales tax. If you are operating your business as a corporation or other business entity, additional taxes may apply. The Illinois Department of Revenue and the IRS provide useful information on taxes for new businesses.

What resources are available to me to help me get set up as a business?

We encourage you to take advantage of the free resources offered by the City’s Small Business Center. The State also offers Small Business Development Centers to provide information, confidential business guidance, training and other resources to new businesses.

Are there additional laws that apply to me as a result of my being a registered business?

Yes. Several consumer protection laws, like the Federal Trade Commission Act and Illinois Consumer Fraud and Deceptive Business Practices Act require you to truthfully describe your Experience in your listing so your guests can make informed decisions. This means that:

• The information you provide to guests must be accurate and not misleading,
• You accurately and completely describe in your listing the main characteristics of your Experience, as well as what is included and any special terms and conditions (for example, my favorite local craft cocktail bar Experience includes the first round of drinks, but guests must pay for additional drinks out of pocket).
• You do not offer a service that you do not intend to provide.
• Your price is accurate, and you do not list an Experience at one price and then charge an additional fee when your guests get there.

In sum, this means that you need to provide the services advertised in your listing, within the advertised dates and times, at the advertised price. For more information, the FTC provides helpful guidance on truth-in-advertising, that we encourage you to review.

*Airbnb is not responsible for the reliability or correctness of the information contained on this page or in any links to third party sites (including any links to legislation and regulations).