Winnebago County, IL Short-Term Rentals: Permit Requirements (2026)

Illinois lodging tax authority for short-term rentals derives from the Hotel Operators' Occupation Tax Act (35 ILCS 145), which imposes the 6% state hotel tax (5.98% effective rate after the Build Illinois Fund split) on stays of fewer than 30 consecutive days in a hotel, motel, bed-and-breakfast, vacation rental, or similar lodging. Local home-rule and non-home-rule municipalities can stack additional hotel/motel taxes on top of the state tax. Rockford, the largest city in Winnebago County, has adopted the Rockford Short-Term Rental Ordinance (Chapter 17, Article VII of the Rockford Code) requiring every dwelling unit used as an STR to be registered with the city's Rental/Short-Term Rental Registry before any rental activity. The ordinance defines three permit types: Type 1 (owner-occupied primary residence), Type 2 (non-owner-occupied, unlimited days, allowed in single-family zones with a Certificate of Occupancy), and Type 3 (non-owner-occupied, capped at 90 rental nights per year). Hosts must keep a guest register with names of all guests over 18 and arrival/departure dates - a digital register on Airbnb or Vrbo satisfies this. Rockford's Community and Economic Development and Fire Department may inspect for building, fire, and life-safety compliance. Rockford applies a local hotel/motel/tourism tax of 5.5% on top of the 6% Illinois state Hotel Operators' tax. Winnebago County itself does not impose a separate county STR licensing program in unincorporated areas, but standard zoning, building code, and septic rules apply, and Loves Park, Machesney Park, and other municipalities each have their own ordinances.