Property Taxes

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Property tax in the State of Illinois is imposed on the value of the real estate only. The State of Illinois imposes no property tax on personal property, including inventories, and has not done so since 1979. The corporate personal property tax was enacted to replace the revenue lost to local units of government when the personal property tax was abolished.

Property taxes are levied by local governments to finance services. The largest share of property taxes go to school districts. The legal assessment level for tax purposes on any parcel of property in Illinois (with the exception of CookCounty) is 33 1/3 percent of its market value, with the exception of farmland and farm-related buildings. The tax rates are determined at the local level. Most tax rates are subject to legal maximums. The rates are based upon the dollars requested by the taxing bodies and the total equalized assessed value within that taxing district boundaries. These rates vary.

Benefits Under Current Law

The revenue act allows any taxing district to abate any portion of its taxes on the property of any commercial or industrial firm newly created in the state during the preceding calendar year or any commercial or industrial firm expanding a previously existing facility. The abatement is available for up to 10 years, and the total amount of taxes abated can be as high as $1 million. In addition, there are preferential assessments for pollution control facilities and low sulfur dioxide emission coal-fueled devices.

Property Tax Cycle

The property tax cycle extends over a two-year period. During the first year, the property is assessed and the assessment reflects the property value as of January 1st of that year. During the second year, the actual tax bills for the prior assessment year are calculated and payments collected from property owners (e.g., the tax for the 2004 assessment is paid in 2005).

Steps in the Property Tax Cycle:

• Assessment — Local assessing officials establish a value (assessment) for each parcel of property.
• Review — Property owners and local taxing districts have an opportunity to appeal assessments.
• Equalization — Chief County Assessment Officers and Boards of Review equalize assessments within the county, and then the state equalization factor (multiplier) determined by the Department of Revenue is applied to assure that the median level of assessments in all counties is 33 1/3 percent.
• Levy — Taxing districts determine the amount in property taxes needed.
• Extension — County clerk apportions the levy among the properties in a taxing district according to their assessed values.
• Collection and distribution equalized — Taxpayers pay their bills and payments are allocated to the local government taxing districts.

Assessments

• Except for farmland and other preferentially-assessed property and property in CookCounty, property is assessed at 33 1/3 percent of its market value. CookCounty "classifies" property and assesses classes at various percentages of market value according to local ordinance.

Farmland in Illinois is assessed on its agricultural economic value, not on its market value. A complex formula takes into account the soil productivity, market conditions, production costs and interest rates.

By law, the department must equalize any assessment discrepancies between counties to be sure that the median level of assessments in each county is 33 1/3 percent. To do this, the department conducts an annual study that compares the selling price of property to its assessed value. Based on that study, the department assigns an equalization factor (commonly called a multiplier) to each county. Equalization between counties:

• assures fairness in property taxes when taxing districts overlap county lines,
• allows fair distribution of state aid based on assessed value, and
• provides equality in determining debt and tax rate limits.

One of the primary roles of CountyGovernment in Illinois is to administer the property tax system. The county government assesses property, collects taxes on behalf of all units of local government and distributes them to the units based upon their specific levy.

For more information about the property tax system, rates, assessments and administration contact:

SOURCE: Illinois Department of Revenue - http://www.iltax.com/LocalGovernment/PropertyTax/index.htm;

McLean County Government - http://www.mcleancountyil.gov