Chicago Budget · Updated November 5, 2026

Protecting Chicago’s Small Businesses From the Proposed City Budget

Q: Why Does SBAC Oppose the Proposed Changes to Chicago Special Event Permits?

Street fests drive local economic growth by bringing thousands of customers to neighborhood business districts and giving small vendors, restaurants, and artists a place to sell. They also provide vital revenue for local chambers of commerce. Higher application fees and responsibility for a much wider range of city services could render many of Chicago’s most iconic special events financially unsustainable.

Q: How Much Would Chicago Street Fest Permit Fees Increase?

Today, outdoor special event permits cost as little as $100 for applications filed more than 60 days in advance. The mayor has proposed an attendance-based structure, with fees ranging from $500 to $8,000 or more. Chicago’s 500+ outdoor special events cost the city roughly $6 million per year, of which it already recovers $2.4 million.

Q: What Else Would the Proposal Change for Chicago Special Events?

Under current law, organizers pay only for police officers and traffic control aides if their event requires more than 12 combined shifts. The mayor has proposed to recover the cost of all necessary city services across all affected departments, and to require events with more than 10,000 expected attendees to submit a formal community engagement plan. Independent farmers’ markets are exempt from application fees but would still be subject to cost recovery.

Q: How Much Would Chicago’s Lease Transaction Tax (PPLTT) Increase?

The proposed budget would increase the Personal Property Lease Transaction Tax from 15% to 20%. At 15%, Chicago’s PPLTT is already the highest in the nation, and it was 9% in 2024. It applies to software subscriptions and to tangible property, such as an oven leased by a neighborhood restaurant or chairs and tables rented by a party supply store.

Q: Why Does SBAC Say Chicago Must Grow Its Way Out of Its Budget Gap?

SBAC understands the need to close the budget gap but strongly opposes these taxes, which would harm small businesses and signal that Chicago is unwelcoming to investment. Chicago must grow its way out of its fiscal crisis. In the long run, these taxes would discourage investment and push small businesses to close their doors.

The mayor’s proposed budget would raise the Personal Property Lease Transaction Tax to 20%, add a new head tax, double the off-premises liquor tax, create a single-use packaging tax, and raise permit fees for street fests. Below, we explain what is proposed and why SBAC opposes it.

Street Fests One-Pager Taxes One-Pager

The proposed budget in three numbers

20%proposed Personal Property Lease Transaction Tax, up from 15%, which is already the highest in the nation.

$8,000+possible special event permit fee under the proposed attendance-based structure, up from as little as $100 today.

$150,000yearly head tax for a business with 500 Chicago-based employees ($25 per employee per month).

Chicago Street Fests and Special Event Permits

Why Does SBAC Oppose the Proposed Changes to Chicago Special Event Permits?

Street fests drive local economic growth because they bring thousands of customers to neighborhood business districts and give small vendors, restaurants, and artists a place to sell. They also provide vital revenue for local chambers of commerce that serve entrepreneurs throughout the city.

However, higher application fees and responsibility for a much wider range of city services could render many of Chicago’s most iconic special events financially unsustainable. In addition, asking more of the organizations that produce them will hurt the communities they support without meaningfully closing the city’s budget gap.

Read Our Street Fests One-Pager

How Much Would Chicago Street Fest Permit Fees Increase?

$100lowest outdoor special event permit fee today, for applications filed more than 60 days in advance

$500–$8,000+proposed attendance-based permit fees

$3.6Myearly net cost of 500+ outdoor special events, after the city recovers $2.4 million of about $6 million

Source: City of Chicago, Office of Budget and Management (2025), Financial and Strategic Reform Options.

What Else Would the Proposal Change for Chicago Special Events?

City service costs: under current law, organizers pay only for police officers and traffic control aides if their event requires more than 12 combined shifts. Instead, the mayor has proposed to recover the cost of all necessary city services across all affected departments.
Community engagement plans: in addition, organizers of events with more than 10,000 expected attendees would have to submit a formal plan with several onerous requirements.
Farmers’ markets: independent farmers’ markets, like those in Logan Square and Hyde Park, are exempt from application fees, but they would still be subject to cost recovery.

Proposed Chicago Taxes on Small Business

How Much Would Chicago’s Lease Transaction Tax (PPLTT) Increase?

9%in 2024

15%today, already the highest in the nation

20%proposed

The proposed budget would raise the Personal Property Lease Transaction Tax from 15% to 20%.

For example, no small business should have to pay a 20% tax on its software subscriptions. The PPLTT also applies to tangible property. A neighborhood restaurant that leases an oven must pay it, and a small party supply store that rents out chairs and tables must collect it. In addition, the proposal would tighten the definition of “small new businesses” that are exempt from taxes on cloud computing.

What Is Chicago’s Proposed Head Tax?

$150,000

per year for a business with 500 Chicago-based employees.

The proposed budget would impose a new tax on every employer that employs or contracts with 125 or more individuals. Specifically, the tax would be $25 per month per employee who performs at least half of their work within the city. Although it would not apply directly to small businesses, it would hurt businesses of all sizes by discouraging larger companies from investing in the city.

What Are the Proposed Liquor and Packaging Taxes?

The proposed budget would double the tax on liquor sales for off-premises consumption and create a tax on single-use packaging used to prepare, package, or ship goods sold at retail.

Together, these taxes would hurt small breweries, liquor retailers, and retailers that package or deliver goods, with minimal financial gain for the city.

Why Does SBAC Say Chicago Must Grow Its Way Out of Its Budget Gap?

We understand the need to close the budget gap, but we strongly oppose these taxes because they would harm small businesses and signal that Chicago is unwelcoming to investment.

Instead, we believe Chicago must grow its way out of its fiscal crisis. In the long run, these taxes would discourage investment and, as a result, push small businesses to close their doors.

Read more about our work in the 2027 advocacy agenda and the Chicago Small Business Bill of Rights, or join the SBAC community.

Read Our Taxes One-Pager