Short-Term Rentals in Waukegan, IL

Every city handles short-term rentals a little differently. In Waukegan, Illinois, there are 4 distinct rules that residents and property owners should be aware of. Some are stricter than what neighboring cities enforce, and others are more relaxed. Here is what you need to know.

Host Platform Liability

Waukegan's hotel-motel tax code treats booking platforms and online travel companies as "owners" of the rental, making them legally responsible alongside the host for collecting and remitting the 6 percent occupancy tax.

Key details: Platform status: Facilitator/online travel company = owner. Governing definition: City Code Sec. 20-76. Collection duty: Owner must secure and remit tax, Sec. 20-77(c). Invoice duty: Tax stated separately at time of collection. Recordkeeping duty: Daily rental/tax records open to city inspection.

A facilitator or platform that fails to collect or remit the tax as an owner is subject to the same penalties under Sec. 20-82 as any other owner: a fine of $200.00 to $750.00 for a first offense and $750.00 for each later offense within 180 days, with repeat violations beyond three in that window chargeable as a misdemeanor carrying up to six months in the county jail.

Short-Term Rental Permits

Waukegan requires every short-term rental to first be registered as a rental property and then licensed specifically as a short-term rental before it can be advertised or rented. The annual license runs January 1 through December 31, requires a nonrefundable fee, and the application must name a Waukegan resident who serves as a 24-hour emergency contact for out-of-town owners.

Key details: License required: Separate from general rental registration. License term: January 1 to December 31. Emergency contact: Waukegan resident, 24-hour contact. Fee: Nonrefundable annual fee, § 14-1104. 2025 cap: None; council may cap later years.

Operating a short-term rental without first completing registration and licensing under Section 14-4(e)(1) through (3) is a violation of Section 14-4(e), carrying a $750.00 fine with each day of unlicensed operation counted as a separate offense. The city also treats unlicensed operation as a public nuisance and an offense against public peace and safety, and may suspend or revoke any license already issued.

This is one of the stricter rules in Waukegan's municipal code. If you are unsure whether your situation complies, it is worth checking with the city before proceeding.

Occupancy Limits

Waukegan caps every licensed short-term rental at the maximum occupancy figure set under Chapter 6 of the city code, and that number must be posted where guests can see it near the unit's entrance. The limit applies at every hour of the stay, not just at check-in, and the licensing official enforces it under Section 14-4(e), the same division that issues the short-term rental license itself.

Key details: Governing section: § 14-4(e)(5). Occupancy source: Chapter 6 max occupancy limit. Posting required: Near the unit's entrance. Penalty: $750.00 per day of violation. License risk: Suspension or revocation.

Occupying a short-term rental beyond its posted maximum violates Section 14-4(e)(5) and (e)(8), carrying a $750.00 fine, with each day of the violation a separate offense. The city may suspend or revoke the short-term rental license, and operating in violation of Section 14-4(e) is itself declared a public nuisance and an offense against public peace and safety.

Taxes & Fees

Every short-term rental transaction in Waukegan is subject to the hotel/motel-style occupancy tax imposed under Article IV of Chapter 20 of the city code. The owner must collect that tax from the renter and remit it to the city, and Section 14-4(e)(7) lets booking platforms handle collection and remittance on the owner's behalf.

Key details: Tax basis: Ch. 20, Art. IV hotel/motel occupancy tax. Who collects: The short-term rental owner. Platform option: Booking platform may remit on owner's behalf. Stacking: In addition to other applicable taxes. Penalty for nonpayment: $750.00 per day, license at risk.

Failing to collect or remit the short-term rental occupancy tax required by Section 14-4(e)(7) and Chapter 20, Article IV is a violation of Section 14-4(e), punishable by a $750.00 fine with each day of noncompliance a separate offense, plus suspension or revocation of the short-term rental license and treatment of the unpaid-tax operation as a public nuisance.

The Bottom Line

Waukegan's short-term rentals rules are a mixed bag. Some areas are strict, others are relaxed, and the details matter. The best approach is to check the specific rule that applies to your situation rather than assuming Waukegan is broadly strict or permissive.

This guide is based on Waukegan's current municipal code. Local rules can and do change, so check the individual ordinance pages for the latest details, penalties, and FAQs.