Can You Run a Business From Your Garage in Chicago? Home Occupation Rules Explained

ByGarage Business Blueprint

This guide is part of our Garage Business Legal Guide.

If you want to run a business from your Chicago house, two-flat or condo, you need a city Home Occupation license. The rules behind it, in the Municipal Code of Chicago, are stricter than many readers expect, especially about garages.

Here is what the code says and what it means for a maker, rental or service business. This is general information, not legal advice. Rules and fees change, so confirm details with the city’s Department of Business Affairs and Consumer Protection (BACP) before you spend money.

Quick facts

  • License: a Home Occupation license under Municipal Code section 4-6-270 is required to run a business from your home.
  • Fee: $250 for a two-year license, according to the city’s home-based business page (as of October 2026).
  • How to apply: through BACP’s Small Business Center; zoning review is part of the process.
  • Space: no more than 10% of a single-family home’s floor area (15% in a multi-unit building), and never more than 300 square feet in total.
  • Garage: may hold incidental supplies and records only. No chemicals, hazardous materials, base metals or unfinished goods.
  • People: one non-resident employee inside the home; no more than two patrons or outside employees at a time and ten in 24 hours.
  • Not allowed: vehicle repair or painting, welding and machine shops, warehousing, food businesses, and more (see below).

Do you need a license?

Yes. The city’s home-based business page states plainly that a City of Chicago business license is required to run a business from your home. The license is a regulated business license created by section 4-6-270 of the Municipal Code, which defines a home occupation as a business or commercial use of a dwelling unit by the people who live there, kept accessory and secondary to its use as a home.

Remote employees doing only clerical or research work for an employer based elsewhere are not running a home occupation, and licensed child care homes have their own licensing.

One license can cover more than one home occupation, as long as each is listed on the application (section 4-6-270(b)).

How to apply

According to the city’s page, the steps are:

  • Submit your initial business information. The government ID you provide must show your home address.
  • Wait for zoning approval. A zoning reviewer checks that your activity is allowed and may ask about storage and vehicle parking.
  • Complete the full application and pay the license fee.
  • Receive the license once all requirements are met. It is valid for two years and must be renewed before it expires.

The application asks where in the home the business will run, what activities you plan, the home’s total floor area, the area you will use, and any accessory building used for storage (section 4-6-270(c)). Measure before you apply.

The city’s page also says some business types, such as home repair and cleaning, must provide a storage lease.

An ordinance introduced in the City Council in June 2026 (O2026-0026292) would amend the home occupation license fee, so check the current amount when you apply.

What you can’t do from home in Chicago

Section 4-6-270(e) lists 24 activities that cannot be licensed as home occupations at all. The ones that matter most to garage businesses are:

  • Repairing or painting motor vehicles, trailers, boats or lawn equipment.
  • Welding or machine shops.
  • Warehousing.
  • Construction or landscaping businesses that store their goods and materials at home.
  • Caterers, food preparation businesses, restaurants and pop-up food establishments.
  • Kennels, stables, animal hospitals and bird-keeping facilities.
  • Barber shops, beauty parlors and massage businesses.
  • Selling firearms or ammunition, or firearm training.

That rules out several common garage ideas in Chicago, including lawn mower and boat repair, auto detailing that involves painting, and metal fabrication. Mobile services are a different story: the code lets you perform services off-site, so a business that works at customers’ homes may still qualify if it stores little at home. Ask BACP before you commit.

For food, the city notes that licensed food preparation isn’t allowed in home kitchens, but some limited foods can be made at home under a Cottage Food Registration from the Chicago Department of Public Health.

Using your garage

This is where Chicago differs most from many cities. Under section 4-6-270(f)(1), the business itself must be carried on inside the dwelling unit. A fully enclosed accessory building, such as a detached garage, may be used only to store supplies and records that are incidental to the business, and only if:

  • The building is fully enclosed.
  • No chemicals, hazardous materials, base metals, or unfinished goods or products are stored there.
  • Records and paper supplies are kept in boxes, file cabinets or other containers, in line with the fire prevention code.
  • The storage counts toward your total floor-area limit.

In practice, a Chicago garage is a storage closet for your business, not a workshop. If your plan depends on power tools, a kiln or a spray booth out there, talk to BACP first or look at renting shop space.

Floor area, signs and the look of your home

Section 4-6-270(g) lists the prohibited acts for licensees. Among them:

  • Floor area: the business, including any storage building, may not use more than 10% of a single-family home or 15% of a unit in a multi-unit building, and never more than 300 square feet per unit. The limit covers all home occupations in the unit combined.
  • Signs: no signs or other evidence of the business on the building exterior, in shared hallways of multi-unit buildings, or anywhere visible from the street.
  • No separate outside entrance used only for the business.
  • No structural changes or equipment that alter the home’s residential character.
  • No noise, vibration, smoke, dust, odors, heat, humidity or glare that unreasonably bothers neighbors.
  • No selling products directly from display shelves or racks.

The license section also says you may not break the Chicago Zoning Ordinance, including its home occupation rules in section 17-9-0202, so both sets of rules apply.

Employees, customers and deliveries

  • Employees: only one non-resident employee may work inside the home. Anyone else working there must live there. Employees who work only outside the home, such as on job sites, are allowed (section 4-6-270(g)(9)).
  • Customers: no more than two patrons, clients or outside employees at once, and no more than ten in any 24-hour period (section 4-6-270(g)(10)).
  • The three-hour presumption: if someone is in your home for more than three consecutive hours in a day, the city presumes they are working there, and it is up to you to prove otherwise.
  • Deliveries: no tractor-trailer deliveries, and no more than one bulk delivery a day, between 8:00 a.m. and 5:00 p.m. Ordinary mail, UPS, FedEx and messenger deliveries don’t count toward that limit (section 4-6-270(g)(11) and (13)).

Note that the city’s web page lists 6 p.m. as the end of the delivery window, while the code text we read says 5:00 p.m. Plan around the earlier time and ask BACP if it matters for your supplier.

State and county registrations

  • Illinois sales tax: if you sell, lease or rent tangible goods at retail in Illinois, including at craft shows and fairs, you must register with the Illinois Department of Revenue, usually online through MyTax Illinois using Form REG-1, and get a Certificate of Registration.
  • Assumed business name: sole proprietors and general partnerships in Cook County that use a name other than the owner’s full name must register it with the Cook County Clerk. The Clerk lists a $50 fee and requires a newspaper notice once a week for three weeks (as of October 2026). LLCs and corporations don’t file there.

For how city, county and state requirements fit together, see our guide to business licenses at the city, county and state level.

Condos, landlords and HOAs

Section 4-6-270(h) is a useful reminder: a city license does not override your condo or co-op bylaws, your lease or private covenants. If those documents prohibit or limit home businesses, the stricter rule still applies. Many Chicagoans live in condos and two-flats, so read your declaration or lease and get written permission from the board or landlord before you apply.

A simple checklist before you start

  • Check the prohibited list in section 4-6-270(e).
  • Measure your space, including garage storage, against the floor-area limits.
  • Plan to do the actual work inside the house.
  • Read your condo, lease or HOA rules.
  • Register with the state and county as needed.
  • Apply to BACP, pass zoning review and note your renewal date.

For workshop safety, see our post on fire code for garage workshops.

More in the Garage Business Legal Guide

Sources

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