Overview: Are Short-Term Rentals Allowed in Paxton, IL?

Yes, short-term rentals are allowed in Paxton, Illinois, but with significant regulatory oversight. Paxton, as the county seat of Ford County, operates under a framework where both county-level zoning regulations and state-level statutes govern STR operations. While no explicit prohibition exists, investors must navigate a complex regulatory environment that includes county zoning ordinances, state preemption laws, and local permitting requirements.

Starting a Short-Term Rental Business in Paxton

Step-by-Step Process

1. Research Zoning Compliance

   • Verify your property's zoning classification (R-1, R-2, R-3 residential districts allow STRs with permits)
   • Check setback requirements (75-100 feet from center lines of highways)
   • Confirm property is not within protected flood zones

2. Obtain Required Permits

   • Apply for zoning permit through Ford County Zoning Department
   • Secure vacation rental license
   • Register for business license

3. Tax Registration

   • Register for Illinois state sales tax
   • Apply for Ford County transient occupancy tax (TOT) registration
   • Set up quarterly tax remittance system

4. Property Preparation

   • Install fire safety equipment (smoke detectors, fire extinguishers)
   • Ensure water/sewage disposal meets Illinois Department of Public Health standards
   • Install adequate off-street parking

5. Ongoing Compliance

   • Maintain active business license
   • File quarterly tax returns
   • Respond to code enforcement inspections

Required Documents, Permits, Licenses, and Guidelines

Permits and Licenses

• Zoning Permit ($150 fee)
• Vacation Rental License ($50 initial + $200 biennial + $150 health department fee)
• Business License (local registration)
• TOT License (transient occupancy tax registration)

Documentation Requirements

• Property deed or lease agreement
• Proof of insurance (liability coverage minimum)
• Fire safety compliance certificate
• Sewage disposal permit (if septic system)
• Parking plan showing compliance with zoning requirements

Health and Safety Standards

• Smoke detectors in all bedrooms and common areas
• Fire extinguisher on each floor
• Carbon monoxide detectors
• First aid kit
• Emergency contact information posted
• Maximum occupancy compliance (typically 2 persons per bedroom + 4 additional)

Specific Regulations: City, County, and State

Ford County Zoning Requirements

Permitted Zoning Districts:

• R-1 Residential: Single-family homes with STR permits
• R-2 Residential: Two-family dwellings allowed
• R-3 Residential: Multi-family units permitted
• AG-1 Agricultural: Tourist courts and room/board operations allowed

Key Restrictions:

• Setback Requirements: 100 feet from state/federal highways, 75 feet from county highways
• Parking: Must provide adequate off-street parking per zoning requirements
• Occupancy Limits: Maximum occupancy based on bedroom count and local health standards
• Noise Restrictions: Quiet hours 11 PM - 8 AM

Prohibited Areas:

• Conservation districts (CO-1)
• Areas within 1.5 miles of corporate limits require additional review
• Flood zones and environmentally protected areas

State of Illinois Regulations

Preemptive Framework: Illinois state law (SB 1735) prevents local jurisdictions from completely prohibiting STRs while allowing reasonable regulations for:

• Public health and safety
• Traffic control
• Zoning compliance
• Tax collection

Tax Obligations:

• State Sales Tax: 6.25% minimum on accommodation charges
• County TOT: Varies by county, typically 3-5%
• Local Hotel Taxes: Additional municipal taxes may apply

Safety Requirements:

• Compliance with Illinois Hotel Operators' Licensing Act
• Fire safety standards equivalent to commercial lodging
• Building code compliance for commercial use

Contact Information for Local Authorities

Ford County Zoning Department

Phone: (217) 379-9431
Address: Ford County Courthouse, 200 West State Street, Paxton, IL 60957
Website: fordcounty.illinois.gov
Email: Contact through county website

Ford County Health Department

Phone: (217) 379-9281
Address: 235 North 3rd Street, Paxton, IL 60957
Website: fordcountyhealth.com
Services: Septic permits, health inspections, compliance verification

Illinois Department of Revenue

Phone: (217) 782-3336
Website: tax.illinois.gov
Services: Sales tax registration, TOT compliance guidance

Paxton City Hall (for areas within 1.5 miles)

Phone: (217) 379-4731
Address: 137 South Market Street, Paxton, IL 60957
Website: cityofpaxton.com

Source References

1. Cornell University Research Report: "Regulating Short-Term Rentals - State Actions and Local Government Solutions" (May 2019)
   Source: https://labs.aap.cornell.edu/sites/aap-labs/files/2022-10/Gandhi%20et.al_2019_FullReport.pdf

2. Ford County Zoning Ordinance: Zoning regulations for Ford County, Illinois (Last revised March 2009)
   Source: https://fordcounty.illinois.gov/wp-content/uploads/2017/10/ZoningOrdinance.pdf

3. Illinois General Assembly Bill Status: SB 1735 regarding short-term rental preemption
   Source: http://www.ilga.gov/legislation/BillStatus.asp?DocNum=1735&GAID=14&DocTypeID=SB&SessionID=91&GA=100

Investment Considerations and Risk Factors

Market Opportunities

• Paxton's location along major transportation corridors provides consistent visitor demand
• County seat activities generate steady business travel
• Agricultural and recreational tourism in the region

Regulatory Risks

• Zoning compliance is strictly enforced in Ford County
• Health department inspections are mandatory
• Tax collection enforcement has increased significantly
• Potential for future state-level preemption changes

Compliance Costs

• Initial setup: $500-1,500 for permits and licensing
• Annual operating costs: $800-1,200 for renewals and compliance
• Potential fines: $500-5,000 for violations
• Tax remittance: 9-12% of gross revenue

Critical Note: The regulatory landscape for STRs in Paxton is complex and subject to change. Investors should engage with local authorities early in the planning process and maintain ongoing compliance monitoring to avoid costly violations and potential license revocation.