Are information services taxable in Illinois?
Not at the state level. Illinois does not tax information services, SaaS or data processing. Chicago is the exception: its Personal Property Lease Transaction Tax reaches cloud and remotely accessed services used by Chicago buyers at 15% since 2026-01-01.
| Short answer | Not taxable (state); Chicago 15% |
|---|---|
| Authority | 86 Ill. Adm. Code pt. 130; Chicago Municipal Code ch. 3-32 |
| Last reviewed | 2026-09-30 |
Why
The Illinois Retailers' Occupation Tax reaches tangible personal property, not remotely accessed services (86 Ill. Adm. Code pt. 130). Information services, SaaS and data processing are not taxed by the state.
Chicago taxes nonpossessory computer leases under Chicago Municipal Code ch. 3-32. The rate stepped to 15% on 2026-01-01. The city tax is the whole tax for these services: it is not stacked with the Illinois state rate.
Data processing follows the same rule: no state tax, and the Chicago lease tax for Chicago users.
Business vs. consumer buyers
Because Illinois does not tax this category, buyer type does not change the answer.
Where the line is
- Purchased downloads are sales, not leases, and follow the ordinary Illinois sales tax path rather than the Chicago lease tax.
How AgentTax classifies information services
Selling access to compiled information: databases, research products, reports and data feeds the seller assembles and furnishes to many customers. AgentTax routes AI research work to its information service category.
Run a Illinois sale through the AgentTax engine and get the amount, the rate it used and the statute behind it. No signup needed.
Open the calculatorFrequently asked questions
- Does Chicago tax cloud and data services?
- Yes. The Chicago Personal Property Lease Transaction Tax applies to nonpossessory computer leases, including cloud and remotely accessed services, at 15% since 2026-01-01.
- Is data processing taxable in Illinois?
- Not at the state level. Chicago users owe the city lease tax instead.
Related
- All Illinois digital tax answers
- Is SaaS taxable in Illinois? (full guide)
- Is digital advertising taxable in Illinois?
- Information services: every state we cover
- Are information services taxable in Arkansas?
- Are information services taxable in California?
- Are information services taxable in Connecticut?
- Are information services taxable in Florida?
- Are information services taxable in Georgia?
- Are information services taxable in Idaho?
Further reading on the AgentTax blog
- Chicago's 15% Cloud Tax Is Now the Highest in the Nation. Here's What SaaS and AI Operators Need to Know.
- Indiana and Illinois Both Said AI Chatbots Aren't Taxable. Here's Why That's More Complicated Than It Sounds.
Sources
- 86 Ill. Adm. Code pt. 130
- Chicago Municipal Code ch. 3-32
This page is for informational purposes only and is not tax, legal, or accounting advice. It reflects AgentTax's current interpretation of evolving law, which can change. Consult a qualified tax professional before making compliance decisions. Positions on this page come from the AgentTax tax policy registry (v1.24.0); see our methodology.