Overview

Short-term rentals are explicitly allowed in Marion, Illinois, but are tightly regulated. The city has adopted a comprehensive ordinance requiring all short-term rental operators to obtain a license and comply with specific requirements. This guide provides investors with all necessary information to legally operate a short-term rental business in Marion.

Is Short-Term Rental Operation Allowed?

Yes, short-term rentals are permitted in Marion, IL under specific regulatory framework. According to the adopted ordinance, a short-term rental includes any property rented to someone outside the operator's family for more than 24 hours but less than 30 days. This definition encompasses entire homes, portions of land for tent camping, and parking for RVs or campers. The city has established a licensing system and inspection requirements to ensure compliance with local regulations.

How to Start a Short-Term Rental Business in Marion

Step 1: Property Assessment and Zoning

• Verify that your property is located within Marion city limits
• Confirm zoning compliance through the city's interactive zoning map
• Assess property suitability for short-term rental use

Step 2: License Application

• Apply for the annual Short-Term/Vacation/Bed & Breakfast rental license
• Complete the registration form specifically designed for vacation rentals and bed & breakfast establishments
• Submit application to Building and Code Services department

Step 3: Inspection Scheduling

• Schedule initial inspection (required twice annually)
• Ensure property meets all safety and code requirements
• Address any violation corrections identified during inspection

Step 4: Tax Registration

• Register for Hotel Operators' Occupation Tax
• File certificate of registration with City Clerk by December 15 annually
• Establish monthly reporting system for tax collection

Step 5: Ongoing Compliance

• Schedule second annual inspection
• Maintain current license and registration
• Submit monthly occupancy tax reports
• Keep property in compliance with all city codes

Required Documents, Permits, Licenses, and Guidelines

Required Licenses and Permits:

1. Annual Short-Term/Vacation/Bed & Breakfast License

   • Cost: $250 per property annually
   • Must be renewed each year

2. Certificate of Registration for Hotel Operators' Occupation Tax

   • Filed with City Clerk
   • Annual renewal required by December 15

3. Inspection Permit

   • $50 inspection fee per property
   • Required twice annually

Required Documentation:

• Completed registration forms for vacation rentals/bed & breakfast
• Hotel Operators' Occupation Tax registration certificate
• Monthly occupancy tax reports
• Proof of property ownership or legal right to operate
• Insurance documentation (recommended)
• Emergency contact information and property management details

Guidelines for Operation:

• Property must comply with all building and safety codes
• Maximum rental period: 30 days or less
• Minimum rental period: 24 hours
• Property must meet inspection standards for habitability
• Operators must collect and remit applicable taxes

Specific Regulations for Short-Term Rentals

City-Level Regulations (Marion):

Licensing Requirements:

• All short-term rentals must obtain annual license
• License application required before operation begins
• Annual renewal mandatory by January 31st

Inspection Requirements:

• Properties inspected twice per year
• One initial inspection upon license application
• One follow-up inspection during license year
• $50 fee per inspection
• Properties must pass inspection to maintain license

Tax Obligations:

• 3% Hotel Operators' Occupation Tax on gross rental receipts
• Tax applies to all rentals under 30 days
• Exemptions for permanent residents (7+ consecutive days)
• Monthly tax reporting required by 10th of following month
• 1% late penalty for failure to file monthly report

Definition and Scope:

• Covers entire homes, portions of homes, and land for camping/RV parking
• Applies to rentals between 24 hours and 30 days
• Excludes rentals to family members
• Includes properties booked through online platforms

County-Level Regulations:

• No county-specific short-term rental regulations identified in provided sources
• State-level regulations may apply

State-Level Regulations (Illinois):

• Hotel Operators' Occupation Tax Act compliance required
• Local municipality taxation authority granted under Illinois constitution
• Revenue limitations apply per state law

Tax and Financial Requirements

Hotel Operators' Occupation Tax:

• Rate: 3% of gross rental receipts
• Reporting: Monthly occupancy tax reports required
• Due Date: 10th day of each month following collection
• Late Penalty: 1% per month for late filings
• Exemptions: Permanent residents (7+ consecutive days)

Additional Costs:

• Annual license fee: $250
• Inspection fees: $50 per inspection (2 per year)
• Registration and compliance costs

Revenue Disposition:

• Tax revenue dedicated to city tourism fund
• Funds used to promote tourism and conventions
• Cannot be used to promote new hotel business competition

Contact Information

Primary Authority: Building and Code Services

Phone: 618.993.2422
Email: tstotlar@cityofmarionil.gov
Email: kspicer@cityofmarionil.gov
Address: 350 Tower Square Plaza, Marion, Illinois 62959
Website: cityofmarionil.gov/building-and-code-services/

City Hall (General Inquiries)

Phone: 618-997-6281
Address: 1102 Tower Square Plaza, Marion, Illinois 62959

City Clerk's Office (Tax Registration)

Location: Marion City Hall, 1102 Tower Square Plaza, Marion, Illinois
Registration Deadline: December 15 annually

Permits and Violations Portal:

Website: marionil.portal.iworq.net/portalhome/marionil
Permit Viewing: marionil.portal.iworq.net/MARIONIL/permits/600
Code Violations: marionil.portal.iworq.net/MARIONIL/cases/400

Links to Source Pages

1. City of Marion Building and Code Services: cityofmarionil.gov/building-and-code-services/
2. City Department Directory: cityofmarionil.gov/organization-chart-directory/
3. License and Permit Forms: cityofmarionil.gov/forms-permits/
4. Permit Payment Portal: marionil.portal.iworq.net/MARIONIL/permits/600
5. Code Violations Portal: marionil.portal.iworq.net/MARIONIL/cases/400
6. Zoning Map: skyview.hornershifrin.com/HSViewer/Index.html
7. News Article on STR Ordinance: thesouthern.com/news/local/communities/marion/marion-adopts-short-term-rental-ordinance-requiring-airbnb-operators-to-get-a-license/article_3ade8e3d-c022-5d69-bd73-f6c1edde9552.html
8. Hotel Operators' Occupation Tax Ordinance: cityofmarionil.gov/wp-content/uploads/2023/05/Ordinance-3882-Amending-the-City-Code-Regarding-Hotel-Operators-Occupation-Tax.pdf
9. Code of Ordinances: codelibrary.amlegal.com/codes/marionil/latest/overview

This guide represents the current regulatory environment for short-term rentals in Marion, Illinois. Investors should regularly verify compliance with all applicable regulations and maintain open communication with the Building and Code Services department to ensure continued legal operation.