2016 Annual Assembly For Winnebago County Township Assessors

2016 Annual Assembly
For
Winnebago County
Township Assessors
Thomas J. Walsh, CIAO-I
Winnebago County Supervisor of Assessments
404 Elm Street, Room #301
Rockford, Illinois 61101
Phone: (815) 319-4468
Fax: (815) 319-4461
[email protected]
[1]
TABLE OF CONTENTS
TOPIC
Purpose of the Meeting
Website Links / Resources
2016 Township Assessor Listing
County Assessment Officials and Staff
2016 Assessment Cycle Flow Chart
2016 Assessment Calendar
Level of Assessments
Omitted Property
Preferential Assessments for Wooded Acreage
• Conservation Stewardship Program Law
• Wooded Acreage Transition Law
Guidelines for Woodland & Forestry Assessments
Tentative 2016 Township Factors
Deed Types for Sales Ratio Studies
Exposure to Open Market
Model Home Valuation
IPAI Policy Change – Continuing Education – CIAO
CIAO Education Requirements
Open Meetings Act (OMA) Training
OMA Letter from Illinois State Education Coordinator
IL Department of Revenue Letter – Multi-Township Districts
Exemptions
• Non-Homestead Exemption
• General Homestead Exemption
o New General Homestead Exemption Form
o Rental Owner Occupied Agreement
• Homestead Improvement Exemption
• Senior Citizen Homestead Exemption
• Senior Citizen Assessment Freeze Exemption
• Disabled Persons’ Homestead Exemption
• Disabled Veterans’ Standard Homestead Exemption
• Returning Veterans’ Homestead Exemption
• Disabled Veterans’ Specially Adapted Exemption
• Veterans’ Organization Assessment Freeze
• Fraternal Organization Assessment Freeze
• Historic Residence Assessment Freeze
Senior Tax Deferral Program
Taxable Leaseholds
Developer’s Relief Preferential Assessment
Mobile Homes
Farmland Assessments
2016 Certified Farm Values
Status of Assessment Administration Bills - 2015
Local Government Consolidation Tax Force Proposals
Assessment Change Requests (ACRs)
Notice of Destruction Calculations Instructions and Form
Certificates of Error
[2]
PAGE
3
3
4
5-6
7
8
9
10
11
11
11
12
13-14
15
16
17
18-20
21
21
22-23
24
25-34
24
24
26
27
28
28
29-30
31
31
32
32
33
33
33
34-35
36-40
41-42
42
43-44
45-49
50-52
53
55
56-57
58-59
Purpose of the Meeting
(35 ILCS 200/9-15)
Sec. 9-15. Annual meeting of supervisor of assessments. In all counties of township organization having a
supervisor of assessments, the supervisor of assessments shall, by January 1 of each year, assemble all
assessors and their deputies for consultation and shall instruct them in uniformity of their functions. The
instructions shall be in writing and available to the public. Notice of the annual assembly shall be published
not more than 30 nor less than 10 days before the assembly in a newspaper published in the township or the
tax assessment district, and if there is no such newspaper, in a newspaper published in the county and in
general circulation in the township or tax assessment district. At the time of publishing the notice, a press
release giving notice of the assembly shall be given to each newspaper published in the county and to each
commercial broadcasting station whose main office is located in the county. The assembly is open to the
public.
Website Links:
Winnebago County Website: http://wincoil.us/
Winnebago County Supervisor of Assessments: http://assessor.wincoil.us
IL-DOR – Property Tax: http://www.revenue.state.il.us/localgovernment/propertytax/
IL General Assembly: http://www.ilga.gov/
IL Property Tax Code:
http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=596&ChapAct=35%A0ILCS%A0200/&ChapterID=8&Ch
apterName=REVENUE&ActName=Property%2BTax%2BCode
Illinois Property Assessment Institute:
http://www.ipaionline.com
[3]
2016 Township Assessors
Burritt / Harrison
Rockford
Miss Theresa Hohlfelder
5314 Eddy Rd.
Winnebago, IL 61088
Office: (815)965-4078
[email protected]
Mr. Ken Crowley
401 W. State St.
Rockford, IL 61101
Office: (815)965-0300
Fax: (815)965-8968
M-F (8:00-4:30)
[email protected]
Cherry Valley
Rockton
Mrs. Danielle Giacomazzo
4875 Blackhawk Rd.
Rockford, IL 61109
Office: (815)874-2119
Fax: (815)873-9663
M-F (7:00-3:30)
[email protected]
Ms. Dana Adams
1315 N. Blackhawk
Rockton, IL 61072
Office: (815)624-2597
Fax: (815)624-7395
M-F (8:00-4:30)
[email protected]
Durand / Laona
Mrs. Paula Lutzow
16900 Goodrich Rd
Durand, IL 61024
Office: (815)248-3039
Fax: (815)248-4444
[email protected]
Roscoe
Harlem
[email protected]
Mrs. Joann Hawes
5792 Elevator Rd.
Roscoe, IL 61073
Office: (815)623-7323
Fax: (815)623-7343
M–Th. (8-4) & Fri. (8-12)
Mr. Mark Sorrentino
819 Melbourne Ave.
Machesney Park, IL 61115
Office: (815)633-9380
Fax: (815)633-6334
Hours: M–Th (8:00-4:30)
[email protected]
Shirland
Miss Theresa Hohlfelder
5314 Eddy Rd.
Winnebago, IL 61088
Office: (815)965-4078
Fax: (815)967-9003
[email protected]
Owen
Winnebago
Mr. Trent Ferguson
6280 Owen Center Rd.
Rockford, IL 61101
Home: (815)965-3082
[email protected]
Mr. Doug Mitchell
505 S. Goodling
Winnebago, IL 61088
Office: (815)335-2706
Fax: (815)335-7529
[email protected]
Pecatonica/Seward
Mr. Scott Hamilton
410 Reed St., PO Box 429
Pecatonica, IL 61063
Phone: (815)239-1394
Fax: (815)329-1795
[email protected]
[4]
Chief County Assessment Officer
Tom Walsh, CIAO-I
Phone: (815)319-4468
[email protected]
Winnebago County Board of Review
Phone: (815)319-4463
Jasper St. Angel
Chairman
Barbara Chaney
Member
Thomas Ewing
Member
Brad Benedict
Additional Hearing Officer
Tom Walsh, CIAO-I
Clerk
Supervisor of Assessments Staff
Terri Reeves, CIAO, Chief Deputy
[email protected]
FOIA Officer, Administrative Office Manager
(815)319-4467
Rose Jackson, Lead Assessment Specialist
[email protected]
Farm, Conservation Programs, Model Homes, Instants
(815)319-4472
Jessica Anderson, Assessment Specialist
[email protected]
Board of Review, PTAB, Exempt Properties
(815)319-4465
Linda Finley, Assessment Specialist
[email protected]
Working of sales and deeds
(815)319-4470
Diane Roberson, Assessment Specialist
[email protected]
Exempt Properties, Co-op Properties, and mobile homes
(815)319-4474
Lottie Barnett, Administrative Clerk
[email protected]
Mail, phones and counter
(815)319-4466
Maria Fernandez-Rivera, Administrative Clerk
[email protected]
Senior Homestead Exemptions, deeds
(815)319-4473
Angie Smith, Administrative Clerk
[email protected]
Owner Occupied Exemption, Rentals exemptions
(815)319-4479
Linda Sneath, Assessment Specialist
[email protected]
Senior Freeze Exemptions, Disabled Exemptions
(815)319-4482
[5]
Supervisor of Assessments Staff (continued)
Deb Ungs, Lead Parcel Maintenance Specialist
[email protected]
Oversees Department, Map corrections, revisions
(815)319-4477
Stephanie Bowerman, Parcel Maintenance Specialist
[email protected]
Map corrections, revisions
(815)319-4471
Thomas Hodges, Parcel Maintenance Specialist
[email protected]
Map Corrections, revisions
(815)319-4478
[6]
The 2016 Assessment Cycle
(35 ILCS 200/9-160): Valuation in Years Other Than General Assessment Years
Responsibilities
of each
Township Assessor
Responsibilities
of the
Supervisor of Assessments
Responsibilities
of the
Board of Review
•Discover, list, and value properties in the township as of January 1
of the assessment year (35 ILCS 200/9-95, et seq.)
•"Revise and correct assessments as needed" (35 ILCS 200/9-75, et
seq.)
•Return assessment rollls to the Supervisor of Assessments by
June 15 of the assessment year (35ILCS 200/9-230)
•Assemble township assessors for instruction on the assessment
process (9-15)
•Prepare and maintain tax maps and parcel ownership
information (9-35)
•Receive and analyze township assessment rolls (9-230, et seq.)
•Equalize assessments within the county or any area therein
(9-210)
•Apply various exemptions to homestead properties (15-165, et
seq.)
•Publish the assessment roll for each township (12-10)
•Provide mailed notice to owners of all property (12-30)
•Certify assessment roll to the Board of Review (9-245)
•Report statistical abstracts to the Illinois Department of Revenue
(17-15)
•Serve as Clerk of the Board of Review (3-30)
•Convene on or before the first Monday in June of the assessment
year (16-30)
•Adopt and publish rules and procedures (9-5)
•Hear complaints and correct assessments for the current
assessment year as appears to be just (16-55)
•Review and rule on applications for exemptions (16-70)
•Issue certificates of error for the prior assessment year until
judgment (16-75)
•Certify the assessment roll to the County Clerk (16-85, et seq.)
•Adjourn by March 15 of the year following the assessment year
(16-35)
[7]
FEBRUARY 26, 2016
APRIL 1, 2016
APRIL 7, 2016
APRIL 20, 2016
APRIL 20, 2016
MAY 1, 2016
JUNE 15, 2015
JUNE 2, 2016
JUNE 2, 2016
JUNE 17, 2016
JUNE 24, 2016
JUNE 30, 2016
JULY 1, 2016
JULY 1, 2016
JULY 12, 2016
JULY 25, 2016
JULY 28 & 29, 2016
July 29, 2016
AUGUST 15, 2016
SEPTEMBER 1, 2016
SEPTEMBER 21, 2016
OCTOBER 6, 2016
OCTOBER 21, 2016
OCTOBER 24, 2016
OCTOBER 31, 2016
NOVEMBER 2, 2016
NOVEMBER 16, 2016
NOVEMBER 21, 2016
NOVEMBER 21, 2016
NOVEMBER 28, 2016
NOVEMBER 30, 2016
NOVEMBER 7, 2016
DECEMBER 7, 2016
DECEMBER 7, 2016
DECEMBER 12, 2016
DECEMBER 16, 2016
DECEMBER 16, 2016
DECEMBER 31, 2016
FEBRUARY 6, 2017
MARCH 6, 2017
MARCH 15, 2017
2016 ASSESSMENT YEAR CALENDAR (TENTATIVE)
PRINT AND MAIL EXEMPTIONS RENEWALS: DISABLED VET, DISABLED PERSON, TOTAL
EXEMPTION AND SENIOR FREEZE APPLICATIONS
DEADLINE FOR MAPPING FOR 2015 T.A. REVISIONS
PRINT AND DELIVER ASSESSORS’ WORKBOOKS - PROVIDE CDS FOR TOWNSHIPS WHO PROCESS
WORKBOOK ELECTRONICALLY (CHERRY VALLEY, HARLEM, ROCKFORD, ROCKTON AND ROSCOE)
GIVE ROCKFORD TOWNSHIP ASSESSMENT FILE
CYCLE DEVNET TO 2015
BEGIN FOLLOW-UP ON SENIOR CITIZEN RENEWALS NOT RETURNED
TOWNSHIP ASSESSORS’ WORKBOOKS DUE (STATUTORY)
2015 BOARD OF REVIEW CONVENES
MEETING TO ESTABLISH BOARD OF REVIEW RULES
ALL T.A. REVISIONS AND FARM SOIL REPORTS (NEW & CHANGES) RETURNED TO SUPERVISOR OF
ASSESSMENTS.
CONDUCT FARMLAND REVIEW COMMITTEE MEETING AND PUBLIC HEARING
DEADLINE FOR OPEN SPACE APPLICATIONS (STATUTORY)
DEADLINE FOR SENIOR CITIZEN ASSESSMENT FREEZE APPLICATIONS (STATUTORY)
LATE CHANGE DEADLINE
COMPLETE ALL ASSESSMENT UPDATING
HAVE ASSESSMENTS AVAILABLE ON SUPERVISOR OF ASSESSMENTS WEBSITE
PUBLISH ASSESSMENTS
MAIL “NOTICE OF ASSESSMENT CHANGES” TO TAXPAYERS
SEND TENTATIVE ABSTRACT TO DEPARTMENT OF REVENUE
DEADLINE FOR FILING COMPLAINTS
DEADLINE FOR SENDING COPIES OF ALL COMPLAINTS TO ASSESSORS
DEADLINE FOR ADDITIONAL EVIDENCE (OTHER THAN 100K)
GIVE ROCKFORD TOWNSHIP NEW FILE
CERTIFICATE OF ERROR (C.O.E.) PROCESSING DEADLINE (TENTATIVE DATE)
CUT OFF DATE FOR PRO-RATA (INSTANT) ASSESSMENTS
DEADLINE FOR ADDITIONAL EVIDENCE (100K)
TURN IN PRO-RATA (INSTANT) ASSESSMENTS TO SUPERVISOR OF ASSESSMENTS
(OCCUPANCY THROUGH OCTOBER 31ST)
PUBLISH SUPERVISOR OF ASSESSMENTS ANNUAL MEETING
NOTIFY TAXING DISTRICTS OF $100,000 REDUCTION REQUESTS
ALL TA RESPONSES TO BE RETURNED TO BOR
ALL BOARD OF REVIEW REVISIONS TURNED INTO THE S.A. /BOR (DATA COPY)
BEGIN BOARD OF REVIEW HEARINGS
COMPLETE PRELIMINARY BOARD OF REVIEW PROCESS AND DECISIONS
SUGGESTED DEADLINE FOR ALL HOMESTEAD EXEMPTION APPLICATIONS
ALL PRO-RATA (INSTANT ASSESSMENTS) PROCESSED AND MAILED
DEADLINE FOR BOARD OF REVIEW REVISIONS FROM MAPPING
ANNUAL TOWNSHIP ASSESSOR MEETING
DEADLINE FOR DEMONSTRATION MODEL HOME APPLICATIONS (STATUTORY)
BEGIN $100,000 HEARINGS
COMPLETE ALL BOARD OF REVIEW HEARINGS
ADJOURN BOARD OF REVIEW (STATUTORY)
[8]
Level of Assessments
All property shall be valued at 33.33% of the fair cash value, except certain exempt properties and those
exceptions listed below:
Statute
Description
35 ILCS 200/9-145
35 ILCS 200/10-5 & 10-10
35 ILCS 200/10-110 to 10-125
35 ILCS 200/10-150
35 ILCS 200/10-35
35 ILCS 200/10-30
35 ILCS 200/10-90 to 10/100
35 ILCS 200/10-155 to 10-165
35 ILCS 200/10-166 to 10-169
35 ILCS 200/10-235 to 10-260
35 ILCS 200/10-500 to 10-515
35 ILCS 200/10-400 to 10-440
Dedicated Nature Preserve under “Illinois Natural Area Preservation
Act” ($1.00 Assessment)
Solar Heating or Cooling - Alternate Valuation
Farmland and Farm Buildings
Approved Forestry Management Plan (ten year management plans)
Subdivision Common Areas ($1.00 Assessment)
Certain Subdivision Land
Airports
Open Space
Land Encumbered by Conservation Rights
Low Income Housing
Woodland Assessments
Conservation Stewardship Program
(35 ILCS 200/1-50) Fair cash value. The amount for which a property can be sold in the due course of business
and trade, not under duress, between a willing buyer and a willing seller.
(35ILCS 200.1-55) One-third of the fair cash value of property, as determined by the Department’s sales ratio
studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes
in assessment levels implemented since the data for the studies were collected.
Uniformity, Uniformity, Uniformity
The statutory assessment level is 33 1/3% of its fair cash value. However, the primary principle to be followed
is uniformity. All assessments in each township should be made on the basis of the prevailing level in the
township, even if the average level of assessment in the township is not 33 1/3%.
If you plan to make “equalization” changes for 2015, remember those changes should be made to the level of
assessments in your township. For instance if your level of assessments is 36%, you should make your changes
to 36%. The township equalization factor will bring those assessments to 33 1/3%, along with the rest of the
township.
Keep in mind that “substantial cause” is needed to change the assessment of owner occupied property that
had an assessment reduction by the Board of Review or PTAB during, or since, the last general assessment
year.
As in the past, I’ll be glad to provide any interested assessor with an adjustment calculator updated for use
with the 2016 assessments.
[9]
Omitted Property
If it is discovered that an improved property has not been assessed as improved, the assessor must determine
the value for each year in which the assessment was omitted and certify said values to the County. If the
improvement should have a prorated value for the first year, the date of occupancy and percentage of
proration should be included. IF the property is eligible for the Owner Occupied Exemption or other
exemptions, the Assessor must indicate for which years the property was eligible.
Criteria for assessing omitted property:
1. The Assessor can only assess omitted improvements, and then only on a parcel if it was previously
assessed as vacant. If a property was preciously assessed with improvements at all, additional
improvements may not be assessed as omitted.
Exceptions:
a. Property which was formerly exempt and loses the exempt status. The assessment to land and
building should be prorated from the date of sale or change in use.
b. Property never assessed, vacant or improved.
c. Property on which the improvement assessment was placed on a wrong pin, refunded on the
wrong pin and is now being billed correctly.
d. Property assessed at $1 as common area in a subdivision where use or ownership changed and
owner failed to notify assessment officials (10-35).
2. If ownership has changed, the present owner can only be billed for those years in which they were in
title. (9-270)
The omitted years’ assessment will be added to the current year assessment and billed in the entirety for
the current year. The following year, the omitted portion of the assessment, which could consist of several
prior years’ assessments, should be removed. The county tries to monitor these parcels to be sure that
the additional improvement is removed in subsequent years, but the assessor should keep a record of the
omitted properties and restore the assessment while in possession of the assessment roll the following
year.
Omitted property should be added at the Board of Review level so that the assessment is identified as
omitted. When the omitted year’s assessment is removed the following year, the county can make note to
the Department of Revenue when submitting final reports and abstracts. This insures that the decrease
from the previous year is not counted as a negative revaluation for equalization and bonus calculation.
The county sends a form to notify the property owner of the omitted assessment. A hearing can be
scheduled for omitted property.
In counties with fewer than 3,000,000 inhabitants, if a chief county assessment officer discovers at any
time before judgment that a property has been granted a homestead exemption under Article 15 of this
Code to which it was not entitled, the chief county assessment officer may consider the erroneously
exempt portion of the property as omitted property under this Section for that taxable year only.
(Source: P.A. 98-615, eff. 6-1-14.)
[10]
Preferential Assessments for Wooded Acreage
You will receive a spread sheet with the following information:
• Parcel Number
• Class Codes(s) 0028 or 0029
• The total number of acres in the parcel
• Number of acres calculated to be in Conservation Stewardship Program (CSP) or in Wooded
T0ransition
These should be turned in with the new Township Assessor values for the current year assessments,
Prior to equalization factors being calculated and applied.
Conservation Stewardship Program Law
(35 ILCS 200/10-400 to 10-440) Property Class Code 0028
Will need to fill out the spreadsheet with:
• 100% of the Market Value for the land that is in CSP
• Assessed Value for any remaining land (non-farm land – home site)
• Assessed Value for any improvements
• Total Assessed Value (CSP MV ÷ 3, non-farm land & non-farm improvement)
Wooded Acreage Transition Law
(35 ILCS 200/10-500 to 10-515) Property Class Code 0029
These parcels must have been a farm in 2006.
Will need to fill out the spreadsheet with:
• The Market Value the farmland would have been in 2006 (if it had not been in farm)
• The current Market Value
• New parcels will have the Transition percentage calculated with the following formula:
2006 EAV as Farmland ÷ 2006 Fair Market Value = Transition Percentage
• Parcels already in transition have been calculated by applying the formula.
• The percentage is frozen, but the assessed values can change from year to year, as the market
value changes.
Guidelines for Woodland and Forestry Assessments are summarized on the following page. For further
information about assessing Wooded and Conservation properties, refer to Publication 135
“Preferential Assessments for Wooded Acreage” from the Illinois Department of Revenue at the
following link:
http://www.revenue.state.il.us/Publications/Pubs/Pub-135.pdf
[11]
Guidelines for Woodland & Forestry Assessments
Is Approval by Illinois
Department of Natural
Resources required?
Minimum acreage required?
Becomes effective?
Valuation method?
2 year use requirement?
Wooded Acreage Assessment
Transition Law
Conservation
Stewardship Law
No
Yes
5 acres
5 acres
No Requirement
No Requirement
Immediately
Jan. 1 after new approval
Jan. 1 after new approval
Jan 1st After two years of mgnt.
Same % of Fair Market Value
the 2006 "other farmland"
assessment represented
5 % of Fair Market Value
1/6 of equalized
assessed value certified
for approved area's PI
1/6 of equalized
assessed value certified
for approved area's PI
No
No
No
Yes
Must be managed for
timber production
according to the FDA plan
Must be systematically managed
for timber production for 2 years
(not just cutting of firewood)
1.) When property is sold
2.) When CCAO is notified
by IDNR that plan has not
been reapproved or tract is
no longer in compliance
with the FDA plan
1.) When the tract is no longer
systematically managed for
timber production. The tract may
qualify for another type of farm
valuation (i.e. cropland or pasture)
or for Wooded Transition valuation.
Must conform to definition of
Woodland,prairie,wetland,
"wooded acreage" by US Dept. or undeveloped according
of Labor Bureau of Land Mgnt.
to approved IDNR plan
1.) When more than 50% of
ownership interest is transferred 1.) When IDNR determines
2.) When remaining qualified
the land no longer meets
Property ceases to qualify..
area falls below 5 acres
the criteria of the program
3.) When the parcel becomes 2.) When the taxpayer fails
eligible for treatment under
to respond to information
another preferential assessment from the IDNR or CCAO
"Dual" Valuation
with Recapture?
No
Yes, for non compliance
Use requirement?
Land Use Code
0029
0028
[12]
Forestry
Management Plan
Forestry (Under
Farmland Assessment Law)
No, but the tract must be
Yes, the plan must conform
systematically managed according
to the requirements of the
to a plan similar to a FDA plan, or
Forestry Development Act(FDA) a wooded part of a farm operation
No
0020/0021
No
0020/0021
[13]
Real Estate Transfer Declarations should be reviewed regularly. It is best practice to perform a field visit to
properties that have recently sold. In this visit, characteristics of the property should be verified. It is
especially important to make note of the condition of the property at the time of sale, both for potential
exclusion from sales ratio studies and in case the sale is cited in a Board of Review appeal, either as a sale of
the subject or as a comparable sale.
In 2010, the General Assembly adopted Public Act 96-1083, which changes how certain “compulsory sales” are
treated in the equalization process. “Compulsory sale” is defined in the statute this way.
Sec. 1-23. Compulsory sale. "Compulsory sale" means (i) the sale of real estate for less than the amount owed
to the mortgage lender or mortgagor, if the lender or mortgagor has agreed to the sale, commonly referred to
as a "short sale" and (ii) the first sale of real estate owned by a financial institution as a result of a judgment of
foreclosure, transfer pursuant to a deed in lieu of foreclosure, or consent judgment, occurring after the
foreclosure proceeding is complete.
Following is an excerpt from Section 16-55 of the Property Tax Code which addresses how the Board of Review
is supposed to determine if “compulsory” sales are to be included in reviewing and correcting assessments.
Sec. 16-55. Complaints. On written complaint that any property is over assessed or under assessed, the board
shall review the assessment, and correct it, as appears to be just, but in no case shall the property be assessed
at a higher percentage of fair cash value than other property in the assessment district prior to equalization by
the board or the Department. The board shall include compulsory sales in reviewing and correcting
assessments, including, but not limited to, those compulsory sales submitted by the taxpayer,
In another section there are guidelines the Board of Review needed to follow in 2011 to determine if the
number of compulsory sales represents more than 25 per cent of the total number of sales in a neighborhood,
township, multi-township assessment district or region. That determination is only to be used in the process
of conducting a sales ratio study which the Board of Review intends to use to calculate factors to be applied to
the neighborhoods, townships, multi-township assessment districts or regions. Boards of review are supposed
to act as equalizing authorities only if the Supervisor of Assessments did not act as an equalizing authority by
equalizing the townships. The Winnebago County Board of Review does not intend to act as an equalizing
authority so this determination will not be necessary.
Township Assessors are required to consider all sales used in the Department of Revenue’s Sales Ratio Study
to determine the assessed value of property. Compulsory sales, as defined above, are to be included in the
Department of Revenue’s Sales Ratio Study and in the county studies if those sales would otherwise be
considered arms-length transactions. Certain sale transactions are not included in the Sales Ratio Study and
cannot be considered by Township Assessors (I.E. A sale in lieu of foreclosure, a court ordered sale or a sale by
a governmental institution). In some circumstances, the County Board of Review and the Illinois Property Tax
Appeal Board may consider sales that are not included in the Department of Revenue’s Sales Ratio Study.
The table on the following page lists all the different types of sale transactions and indicates whether or not
the transaction type is considered a valid sale and included in the Department’s Sales Ratio Study, unless there
is another reason the sale would be excluded. The table also indicates whether or not the sale would be used,
as a comparable, by our Board of Review.
[14]
Deed Types for Sales Ratio Studies and Comparable Selection
[15]
Exposure to the Open Market
During the past few years, there has been much discussion in the assessment community concerning exposure
to the open market and what evidence the department requires in order to support removal of sales not
exposed to the open market in the Department’s sales-ratio studies.
In 1994, the Department of Revenue adopted this definition of “Exposure to the Open Market”, which is still in
use:
Exposure to the open market means that the owner of a parcel of real property either personally
or by agent gave notice to the general public by advertisement or other means of the intention
of that owner to sell that parcel of real property to another person.
If you wish to seek the removal of a sale from a study for this reason, you may submit applicable evidence any
time before the tentative multiplier hearing. Evidence which may be submitted includes:
1. A written statement from the seller stating that no one but the buyer had the opportunity to purchase
the property;
2. A copy of a contract stating that the buyer had the option to buy at the time of the sale;
3. A written statement from the seller indicating that the property was not listed with a real estate agent
or broker, that the property was not advertised for sale in a newspaper, magazine, or through
broadcast or electronic media (including the internet), and that there was no sign indicating that the
property was for sale; or
4. A written statement from the buyer stating that he approached the seller about purchasing the
property without the seller having indicated in any way that the property was for sale.
If you have questions or wish to submit documentary evidence regarding sales, please e-mail Linda Finley at
[email protected] or call her at (815) 319-4470.
[16]
Valuation of Model Homes
(35 ILCS 200/10-25)
If an approved application is filed on or before December 31st of the current tax year, the equalized assessed
value of real property upon which construction of a single family model home has been initiated or completed
shall be the same as the EAV prior to construction until such model home is sold or occupied. Property
owners must file a new application each year. The demonstration model home must be a single family
dwelling or condominium and must be used as a display or demonstration model for prospective buyers of
such dwelling or of similar homes to be built on other lots.
Only one model home of a particular style and size, within the same subdivision can receive this exemption.
Any single family dwelling, townhome, or condominium unit that has been occupied or leased for use other
than as a display or model home will be disqualified from receiving this exemption. No office area in a model
home may exceed 500 square feet or 20% of the ground floor square footage. The model home exemption
cannot be granted for more than 10 years on any one parcel. No corporation, individual, sole proprietor, or
partnership may have more than a total of 3 model homes preferentially assessed as a demonstration model
home at the same time within a three (3) mile radius. The center point of the radius shall be the model home
that has been used as such for the longest period of time.
Assessors will be notified of the applications. Assessors are asked to review each request for model home
exemption for inconsistencies. In the case of multi family structures, assessors are asked to give an assessed
value for each unit. Assessors need to bring all parcels which were granted this exemption for model homes
to full value as of Jan. 1st of the following year. Contact Rose Jackson [email protected] with questions.
[17]
IPAI Policy Change - Continuing Education - CIAO
[18]
[19]
[20]
Summary of Education Requirements
•
•
•
•
Must have 30 hours (two 15 hour courses) of continuing education in the year prior to the election, one of
which must be an exam course. (Election year is 2017, so courses must be taken in 2016.)
Must take a minimum of two additional 15 hour courses (seminar or test) in the 4-year cycle prior to
election to maintain CIAO. (Cycle #1 is 2011 – 2014)
Not eligible for $500 education stipend unless you take 30 hours per year, including a 15 hour exam
course.
Assessment officials that have served for more than 12 years, with a minimum of 360 hours of completed
courses (at least 180 of exam courses) are qualified to run for office without taking any additional classes
per 35 ILCS 200/2-45(c)(6):
Open Meetings Act Training
•
•
•
Public Act 97-0504 - Requires ALL elected and appointed officials in Illinois to successfully complete an online training curriculum for the Open Meetings Act administered by the Office of the Attorney General by
January 1, 2013.
Log on to http://foia.ilattorneygeneral.net/ to take the training. Estimated completion time is one hour.
See following letter to all Township Supervisors for more details.
*This is just a reminder in case anyone forgot the training.
[21]
[22]
[23]
[24]
Non-Homestead Exemptions
(35 ILCS 200/15-5, et seq.)
The owners of exempt non-homestead properties are required to file an annual affidavit or certificate of
exempt status, which states whether there has been any change in the ownership or use of the property on or
before January 31 of each assessment year. The information provided helps keep property tax rolls accurate
and facilitates assessment of taxable, leasehold interests. If a property owner fails to file an affidavit or
certificate of exempt status, the Supervisor of Assessments has discretion “to terminate the exemption of that
property” under 35 ILCS 200/15-10, et seq.
Exceptions to this requirement include property exempted for religious purposes, orphanages, or schools,
burial grounds owned by a not for-profit organization under Section 15-45 or exempt property of the United
States under Section 15-50.
Township Assessors must be alert for previously exempt property where ownership or use has changed, and
be prepared to make an assessment accordingly. On newly acquired property or property going into exempt
use, neither the Township Assessor nor the Supervisor of Assessments has the legal authority to exempt
property from taxation. A petition for exemption must be filed with the Board of Review by the owner; the
Board will then make a recommendation regarding the petition, and forward it to the Illinois Department of
Revenue for a final determination.
For more information, please e-mail Diane Roberson at [email protected] or call her at (815) 319-4474.
General Homestead Exemption
(35 ILCS 200/15-175)
Applications for the General Homestead Exemption must be filed by the owner of record or person with
equitable interest in said parcel. For the initial application, photo identification with a current address is
required and additional documentation may be requested. After the initial application is filed, no annual
renewal is required. This exemption will remove up to $6,000 of the increase in assessed value above the
1977 “base value” of the property. An updated one-part application is attached and is available on our
website.
Public Act 91-346 authorized a pro-rata exemption for new construction property that is first occupied as a
residence after January 1 of any assessment year by a person who is otherwise eligible for the General
Homestead Exemption.
In the case of a sale, subsequent to January 1, the exemption will not be terminated until the end of the tax
year.
The General Homestead Exemption is available on single family rental properties. In addition to the
completed application, a rental tax agreement form must be submitted with a copy of the lease verifying
occupancy on January 1 by the tenant listed on the agreement. An annual renewal is required. The 2016
rental tax agreement form is attached. The renewal is due before April 1, 2016.
For more information, please email Angie Smith at [email protected] or call (815)319-4479.
[25]
[26]
[27]
Homestead Improvement Exemption
(35 ILCS 200/15-180)
A property must be a single family dwelling, the principal residence of the owner, and have new
improvements, (such as an addition, patio, or deck) that increase the assessed value of the property to qualify
for this exemption. The improvement must be 100% complete to qualify. Amounts for the Homestead
Improvement Exemption must be reported with the assessment changes from each Township Assessor. This
exemption is granted for four years.
Generally, a property receiving the Homestead Improvement Exemption (HIE) is also eligible for the General
Homestead Exemption. If the property does not have a General Homestead Exemption, it will not qualify for a
Homestead Improvement Exemption. After initial application is filed, no annual renewal is required.
This exemption reduces the Assessed Value by the amount that the new improvement increased the
assessment, up to a maximum reduction of $25,000. This amount is subject to equalization.
EXAMPLE:
$50,000 AV of which $8,537 is the addition; equalization factor of .9365; EAV changes to ($50,000
x 0.9365) $46,825, and HIE changes to ($8,537 x 0.9365) $7,995.
Senior Citizen Homestead Exemption
(35 ILCS 200/15-170)
Applications for the Senior Citizen Homestead Exemption (65 and over) must be filed by the owner of record
or person with an equitable interest in said parcel. Additional documentation may be requested.
Public Act 93-0511 authorized a pro-rata exemption for property that is first occupied as a residence after
January 1 of any assessment year by a person who is eligible for Senior Citizens Homestead Exemption under
Section 15-170 of the Property Tax Code. A pre-existing exemption will not be terminated. The test for
equitable interest is the same as the test used for the General Homestead Exemption.
This exemption will remove up to $5,000 of the equalized assessed value from their property. This exemption
must be renewed yearly; renewal forms are mailed.
For more information, please e-mail Maria Fernandez-Rivera at [email protected] or call her at
(815) 319-4473.
[28]
Senior Citizen Assessment Freeze Exemption
(35 ILCS 200/15-172)
When a Senior Citizen applies for and is approved for the Senior Citizen Homestead Exemption, the taxpayer
will receive the Senior Citizen Exemption and Assessment Freeze Application in the mail. However, renewal
forms are not mailed if the Senior Citizen Homestead Exemption is on a rental property. Each qualifying
taxpayer must complete the application each year and return it to our office. All applications are processed
through the Supervisor of Assessments Office. The application must include ALL household income of ALL
people residing in the house. The total household income cannot exceed $55,000.
To qualify, a senior taxpayer must have owned and lived on the property on January 1 of the previous and
current tax years. The frozen base amount is based on the previous year that the senior citizen first qualifies.
If the property has been revalued at a lower value than the original base year, the base will be changed to the
lower value. Property owners or those with equitable interest may apply for the exemption any time during
the year in which they turn the age of 65.
Information gathered from applications for the Senior Citizens Assessment Freeze Homestead Exemption is
confidential. Any improper disclosure is a Class A misdemeanor (punishable by a jail term of up to one year or
fine up to $1,000). If there are any questions in regards to above information, please call the Supervisor of
Assessments Office.
Once a base year EAV has been established for that applicant, it will remain until the property is sold or the
property has been revalued to a lower amount. If the taxpayer does not qualify for a year or two after a base
has been established, the same base amount will still be used when the taxpayer qualifies again unless the
current value is lower than the base.
What Happens If a Senior Freeze Base Year Amount Decreases?
Generally, if a property’s EAV drops below the Base Year EAV, the new lower EAV becomes the new Base Year
EAV. In the following example, the EAV in the first year the property qualifies for the Senior Freeze is $52,500.
As the prior year’s EAV was $50,000, the Base Year EAV is established at $50,000. The difference between the
Base Year EAV and the Current Year EAV is the amount of the exemption.
Year
0
1
2
3
4
5
6
7
8
9
10
EAV
$50,000
$52,500
$55,125
$57,881
$54,987
$52,238
$49,626
$47,145
$49,502
$51,977
$54,576
Exemption
Amount
N/A
$2,500
$5,125
$7,881
$4,987
$2,238
$0
$0
$2,357
$4,832
$7,431
Billable
EAV
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$49,626
$47,145
$47,145
$47,145
$47,145
[29]
Base year
EAV
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$49,626
$47,145
$47,145
$47,145
$47,145
In year 6 of this example, the EAV is below the Base Year EAV; therefore, the year 6 EAV becomes the new
base year EAV. This repeats in year 7, as the Base Year EAV is lowered again. However, in both years the
exemption amount is $0, because there is no difference between the Current Year EAV and the Base Year EAV.
In Year 8 of this example, the EAV starts to rise again. The Base Year EAV does not rise back to the original
$50,000, but is locked in at the Year 7 level of $47,145.
For more information, please e-mail Linda Sneath at [email protected] or call her at (815) 319-4482.
[30]
Disabled Persons’ Homestead Exemption
(35 ILCS 200/15-168)
A disabled person may be eligible for an exemption that will remove $2,000 of equalized assessed value from
their property. Applications are available from the Supervisor of Assessments Office and must be filed by the
owner of record (or person holding equitable interest) and made each year the taxpayer remains eligible.
To qualify for this exemption, the taxpayer must be “unable to engage in substantial gainful activity by reason
of a medically determinable physical or medical impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months.” Evidence that a taxpayer meets this
condition includes:
• A Class 2 (or 2A) Illinois Disabled Person ID Card from the Secretary of State’s Office.
• Proof of Social Security Administration disability benefits.
• Proof of Veterans Administration disability benefits.
• Proof of Railroad or Civil Service disability benefits.
• An examination by a physician licensed in Illinois (must meet the same standards as used by the Social
Security Administration).
An eligible taxpayer must occupy the property as their primary residence as of January 1 of the assessment
year, must be liable for paying the real estate taxes and must be an owner of record or have a legal or
equitable interest in the property as evidenced by a written instrument. A taxpayer may not claim this
exemption if they claim the Disabled Veterans Specially Adapted Exemption (35 ILCS 200/15-165) or the
Disabled Veterans Standard Homestead Exemption (35 ILCS 200/15-169).
For more information, please e-mail Linda Sneath at [email protected] or call her at (815) 319-4482.
Disabled Veterans’ Standard Homestead Exemption
(35 ILCS 200/15-169)
A disabled veteran may be eligible for an exemption that will remove assessed value according to the
following table:
Disability Percentage
Exemption Amount
30% to 49%
50% to 69%
70% or more
$2,500
$5,000
Total Exemption
To qualify for the Disabled Veterans’ Standard Homestead Exemption the veteran must meet the following
requirements:
• Be an Illinois resident who has served as a member of the U.S. Armed Forces on active duty or state
active duty, Illinois National Guard, or U.S. Reserve Forces, and not dishonorably discharged.
• Have at least a 30% service-connected disability certified by the U.S. Department of Veterans’ Affairs.
• Must be the owner of record and occupy the house as of January 1 of the assessment year.
• The property must have a total equalized assessed value of less than $250,000 for the primary
residence.
An unmarried surviving spouse of a disabled veteran may continue to receive this exemption on his or her
spouse’s homestead property or transfer the exemption, one time, to a new primary residence.
A taxpayer may not claim this exemption if they claim the Disabled Veterans Specially Adapted Exemption (35
ILCS 200/15-165) or the Disabled Persons’ Homestead Exemption (ILCS 200/15-168). Applications are
available from the Supervisor of Assessments Office and must be filed by the owner of record (or person
holding equitable interest) and renewed each year the taxpayer remains eligible.
For more information, please e-mail Linda Sneath at [email protected] or call her at (815) 319-4482.
[31]
Returning Veterans’ Homestead Exemption
(35 ILCS 200/15-167)
The returning veteran may be eligible for this exemption which will remove $5,000 of equalized assessed value
from their property. Applications are available from the county assessment office and must be made for the
year in which the qualifying veteran returns from active duty in an armed conflict.
To qualify for the Returning Veterans’ Homestead Exemption the veteran must meet the following
requirements:
• Be an Illinois resident who has served as a member of the U.S. Armed Forces, Illinois National Guard, or
U.S. Reserve Forces.
• Return from active duty in an armed conflict involving the armed forces of the United States during the
assessment year.
• A veteran who dies during his or her active duty service is eligible to receive this exemption.
• Owned or had a legal or equitable interest in the property used as the principal place of residence on
January 1 of the assessment year.
• Must be liable for the payment of the property taxes.
This exemption may be claimed only in the year in which the eligible veteran taxpayer returns from active duty
in an armed conflict, plus one subsequent year. If a veteran taxpayer receives this exemption, then is again
deployed on active duty in an armed conflict and returns again in a subsequent year, the veteran taxpayer is
eligible for this exemption again if the other conditions are met.
For more information, please e-mail Linda Sneath at [email protected] or call her at (815) 319-4482.
Disabled Veterans’ Specially Adapted Exemption
(35 ILCS 200/15-165)
This exemption of up to $70,000 of assessed value is available for property on which Federal funds have been
used to purchase or construct special adaptations to suit the veteran’s disability. The property must be owned
and used exclusively as a residence by a disabled veteran, the spouse, or unmarried surviving spouse of the
veteran. This exemption may be available if the person has served in the Armed Forces of the United States
and whose disability is of such a nature that the Federal Government has authorized payment for purchase or
construction of Specially Adapted Housing as set forth in the United States Code, Title 38, Chapter 21, and
Section 2101.
The exemption may also apply to housing that is specially adapted to suit the disability if the property was
purchased entirely or in part by the proceeds of a sale, casualty loss reimbursement, or other transfer of a
home for which the Federal Government had previously authorized payment for purchase or construction as
Specially Adapted Housing.
This exemption must be renewed on an annual basis by certification from the Illinois Department of Veterans’
Affairs to the Supervisor of Assessments Office. A taxpayer who claims either the Disabled Persons’
Homestead Exemption or the Disabled Veterans’ Standard Homestead exemption may not claim this
exemption. Contact Terri Reeves at [email protected] or (815)319-4467 if you have any questions regarding
this exemption.
[32]
Veterans’ Organization Assessment Freeze
(35 ILCS 200/10-300)
Veterans’ organizations must annually file an application with the Supervisor of Assessments Office to receive
the assessment freeze. The annual filing deadline is December 31.
For more information, please e-mail Jessica Anderson at [email protected] or call her at (815) 319-4465.
Fraternal Organization Assessment Freeze
(35 ILCS 200/15-350, et seq.)
The fraternal organization must apply to the Supervisor of Assessments Office by December 31. The
Supervisor of Assessments Office will make the determination whether the documentation submitted is
sufficient for eligibility for the freeze.
For more information, please e-mail Jessica Anderson at [email protected] or call her at (815) 319-4465.
Historic Residence Assessment Freeze
(35 ILCS 200/10-40, et seq.)
This Property Tax Assessment Freeze is available for owner-occupied certified historic residences that are
being rehabilitated. The property must be a registered historic structure, either by listing on the National
Register of Historic Places or designated by an approved local historic preservation ordinance. The Illinois
Historic Preservation Agency (IHPA) should be contacted for information pertaining to the certification
process.
In order to qualify for the freeze, a property must be a single-family owner-occupied residence or
condominium, a cooperative, or an owner-occupied residential building with up to six units. In addition, at
least 25% of the property’s market value must be spent on an approved rehabilitation project. The
rehabilitation must be substantial, significantly improve the condition of the historic building, and be in
accordance with the Secretary of the Interior’s “Standards for Rehabilitation”. The IHPA notifies the
Supervisor of Assessments Office of properties that qualify for this exemption via the Certificate of
Rehabilitation. Applications for the Certificate must be submitted within two years of project completion.
The assessed valuation of the property is frozen for eight years at the level the year rehabilitation began. The
valuation is then brought back to market level over a period of four years. If the property is sold within the
eight-year freeze period, or if its use changes from the uses set forth above, the Certification will be revoked.
For more information, e-mail Tom at [email protected] or call (815)319-4468.
[33]
Senior Tax Deferral Program
Due to State Law, we are required to notify seniors of the availability of the senior tax deferral program. The
Treasurer’s office will have applications available by January 1st. Contact the Treasurer’s office for the
application forms. The deadline for filing will be March 1st. Questions concerning the specifics of this
program are to be referred to the Treasurer’s Office at (815) 319-4400. The following page, provided by the
Treasurer’s Office, explains recent changes to this program. The Treasurer’s Office reports there are no
changes to the program for 2015 taxes payable in 2016.
[34]
[35]
Taxable Leaseholds
The following information on Taxable Leaseholds was provided at the 2007 Department of
Revenue Orientation for new Chief County Assessment Officers.
For property taxation purposes in the state of Illinois, real property is taxed under the fee simple interest
which is the highest ownership interest. The statutory liability for property taxes is based on ownership and
not on any lesser interest, including but not limited to leaseholds. Consequently, leaseholds are not ordinarily
considered real property for purposes of taxation and even if a property is leased (as most commercial or
income producing property types are) the leasehold interests are not separated from the fee simple and
separately taxed. Although a leasehold interest is considered to be a chattel or personal property of the
lessee and not real estate, the courts have held that it is within the power of the legislature to declare a
leasehold interest to be real estate for purposes of taxation. City of Chicago v. University of Chicago, 302 111.
455, 134 N.E. 723 (1922); Apex Oil Co. v. Henkhaus, 118 Ill.App.3d 273, 454 N.E.2d 1032, 73 111.Dec. 783 (5th
Dist. 1983).
In addition to a leasehold interest in mineral rights which is considered to be taxable real estate just as an
ownership interest created by deed, the other significant exception to the nontaxable leasehold rule arises in
the case of certain leaseholds in exempt lands. The statutory authority to tax a leasehold interest in taxexempt real estate has been applied on numerous occasions. People v. International Salt Co., 233 111.223, 84
N.E. 278 (1908); City of Chicago v. University of Chicago, supra; People ex rel. Paschen v. Hendrickson-Pontiac,
Inc., 9 I11.2d 250, 137 N.E.2d 381 (1956); People ex rel. Konen v. American Airlines, Inc., 39 I11.2d 11,233
N.E.2d 568 (1967); People ex rel. Kucharski v. Trans World Airlines, Inc., 43 111.2d 174, 251 N.E.2d 225 (1969);
In re Application of Skidmore, 75 11 1.2d 33, 387 N.E.2d 290,25 I11.Dec. 634 (1979); Apex Oil Co. v. Henkhaus,
supra.
For property tax purposes in Illinois, leasehold is taxable if each of the following three conditions exists:
1. The property is exempt from taxation as determined by the department or a court; and
2. The property is leased to another person or entity whose property is not exempt from taxation; and
3. The leasing of the property does not cause the property to lose its exempt status for purposes of
taxation.
In part, Section 9-195 of the Property Tax Code provides:
Except as provided in Sections 15-35.15-55, 15-60, 15-100, 15-103, and 15-185, when property
which is exempt from taxation is leased to another whose property is not exempt, and the
leasing of which does not make the property taxable, the leasehold estate and the
appurtenances shall be listed as the property of the lessee thereof, or his or her assignee.
Taxes on that property shall be collected in the same manner as on property that is not
exempt, and the lessee shall be liable for those taxes. However, no tax lien shall attach to the
exempt real estate . . .
[36]
The owner, or lessor, of the property has no tax liability and if the property tax on the leasehold becomes
delinquent, a lien on only the leasehold interest may be sold at a tax sale. The property rights retained by the
owner are not subject to a tax sale.
Valuation Procedures
Section 9-145 (b) of the Property Tax Code states that “Each taxable leasehold estate . . . shall be valued at 33
1/3% of its fair cash value.” The Illinois Supreme Court directed a vast change in the methodology for
assessment of taxable leasehold estates by its decision in People ex rel. Korzen v. American Airlines, Inc., 39
I11.2d 11, 233 N.E.2d 568 (1967). The court held that the fair cash value of a leasehold is the present
economic equivalent (present worth) of the periodic market rent to be paid through the unexpired term of the
lease. The rent used in deriving the fair cash value is the market rent for similar property and is not necessarily
the contract rent under the lease. Likewise, the capitalization rate used is the same capitalization utilized in
the jurisdiction for establishing market value under the income approach for similar property types.
One of the major problems an assessment official will encounter is the failure to understand how to value
leaseholds for ad valorem taxation purposes by the general appraiser community. Typical appraisal theory
values a leasehold based solely upon the “rent advantage” of favorable contract rent versus market rent over
an extended period of a long-term lease. The essence of the ruling in American Airlines was to disallow any
deduction to the taxpayer-lessee, in valuing the “leasehold” for assessment purposes, for the present value of
the future rental payments reserved to the lessor-owner under the lease contract. Allowing such a deduction,
the Supreme Court said, would amount to valuing the lessee’s “equity” in the lease rather than the
“leasehold.” The “leasehold” value comprised, according to the court, the full market value “of the right to the
use and possession of the demised premises for the full term of the lease.” 233 N.E.2d at 572.
This decision “sharply increased” the value attributable to taxable leaseholds in exempt lands, in some
instances (depending on the lease term) to the point of substantial equivalence between the so-called
“leasehold” value and the value of the fee owner’s interest. The reason for this increase in the value of a
taxable leasehold under the American Airlines methodology is precisely the disallowance of any deduction for
value attributable to the lessor’s interest in the land, represented by the rental reserved under the lease
contract.
Valuation Method & Examples
American Airlines has set the method for valuing leaseholds as the present value or worth of market rent
payments over the unexpired term of the lease. The value calculation is achieved by utilizing either the
Present Worth of $1 or the Present Worth of $1 per Period columns in the financial tables (six functions of a
dollar tables) and the proper capitalization rate for the remaining term of the lease. For example:
The county park district leases a snack bar/limited service restaurant in a district owned sports field complex
to a local restaurateur. The term of the lease is for two (2) years and the $15,000 per year contract rent is
considered market rent. Market data research has revealed that the proper capitalization rate is 12%. The
value of leasehold rights of the restaurateur is the present value of the two $15,000 payments. Using the
[37]
Present Worth of One per period factor (12% annual interest rate for 2 years) which is 1.690051, the value of
the leasehold for property tax purposes is $25,351. ($15,000 X 1.690051= $25,351)
This method of valuation applies to farmland as well as non-farm property, except parcels of one acre or
more leased from the state of Illinois. These state owned parcels are assessed as farmland under Section 10-1
10 and 10-1 15 of the Property Tax Code. In addition, if the lessee constructs the building on the leased
property, the land and building are assessed as the leasehold even if the ownership of the building is passed to
or reverts to the owner (lessor) at the end of the lease. Apex Oil Co. v. Henkhaus, supra.
The purpose of Property Tax Code Section 9-145 is to tax at least a portion of the value of property that is
exempt from taxation to its owner irrespective of use when a lease results in the sort of use of the property by
the lessee that would normally subject the property to taxation if the lessee were an owner. By and large,
however, it is the use made of the property and not the character of the owner that determines the question
of tax exemption. However, in a limited but important class of cases, property is exempt as to its owner
irrespective of leasing, whether or not the lease is made with a view to profit. A primary category of property
exempt by virtue of ownership alone is property of the State of Illinois. By virtue of Section 9-145, however,
the leasehold interest is taxable to the lessee as real estate. The number and significance of state-owned
properties that have raised the issue of a leasehold tax assessment are sufficiently large that the language of
9-145 has been duplicated and, to some extent, extended in the Code provision specifically exempting State of
Illinois property. (15-55) Much of this language can be traced to tax disputes concerning Illinois Tollway “oasis”
facilities, which are operated under lease or license agreements on property owned by the state through the
Illinois State Toll Highway Authority. See Illinois State Toll Highway Commission v. Korzen, 32 I1 1.2d 338, 205
N.E.2d 433 (1965) (tollway oases exempt under Toll Highway Act despite Revenue Act §26); In re Application of
Skidmore, supra (oases leaseholds taxable under §26 and amended Toll Highway Act); County of Boone v.
Department of Revenue, 215 Ill.App.3d 453, 574 N.E.2d 1227, 158 111.Dec. 834 (2d Dist. 1991) (although
tollway leaseholds were taxable, “licenses” were not, despite contrary amendment).
Distinguishing Leaseholds from Licenses
If a mere license is granted to manage or use property exempt by ownership rather than a true leasehold
estate, it will not be subject to taxation under Code Section 9-145. Application of Rosewell, 69 Ill.App.3d 996,
387 N.E.2d 866, 26 Ill.Dec. 36 (1st Dist. 1979); Jackson Park Yacht Club v. Department of Local Government
Affairs, 93 Ill.App.3d 542, 417 N.E.2d 1039, 49 111.Dec. 212 (1st Dist. 1981); County of Boone v. Department of
Revenue, 215 Ill.App.3d 453, 574 N.E.2nd 1227, 158 Ill.Dec. 834 (2d Dist. 1991). This has led to some contracts
that attempted to convert taxable leaseholds to nontaxable licenses by artful word crafting. The courts,
however, have looked through the form to the substance of these transactions, and when the essential
characteristics of a lease are found, the transaction will be treated as such and not as an exempt license.
In Stevens v. Rosewell, 170 Ill.App.3d 58, 523 N.E.2d 1098, 1101, 120 111.Dec. 187 (1st Dist. 1988), the
appellate court held that a purported license granted to the operator of a franchised restaurant located on a
community college campus was a lease, noting:
[The] [e]ssential requirements of a lease include: a definite agreement as to the extent and
bounds of the property; a definite and agreed term; and a definite and agreed rental price
[38]
and manner of payment [citation]. A license is not assignable, and merely gives another the
right to use the premises for a specific purpose with the owner retaining possession and
control. Quoting Jackson Park Yacht Club, supra, 417 N.E.2d at 1043.
See also People v. Chicago Metro Car Rentals, Inc., 72 IlI.App.3d 626,391 N.E.2d 42, 28 111.Dec. 843 (1st Dist.
1979) (airport concession agreement constituted lease). In County of Boone v. Department of Revenue, supra,
one of several disputes concerning leasehold taxation of Illinois Toll Highway Authority “oasis” properties,
agreements between the highway authority and Mobil Oil Company and McDonald’s Corporation for
operation of the Belvidere Oasis were held to be nontaxable licenses rather than leases. The court noted that
the agreements did not use the term “lease” or grant covenants of quiet enjoyment, nor did they contain a
legal description of the property, and they reserved control of several aspects of the companies’ operations to
the authority, which were enforced by weekly inspections. 574 N.E.2d at 1228 - 1229.
Perhaps more significant, the County of Boone court declined to apply amendments made in 1987 and 1989 to
Section 19.5 of the Revenue Act (now Code Section 15-55), which sought to eliminate the distinction between
licenses and taxable leases of toll highway property:
For the purposes of this Section, the word “leases” includes licenses, franchises, operating
agreements and other arrangements under which private individuals, associations or
corporations are granted the right to use property of the Illinois State Toll Highway Authority
and includes all property of the Authority used by others without regard to the size of the
leased parcel.
Valuation Exercises
•
The Decatur Park District leases 160 acres of ground to a farmer for $155 per acre per year. The term
of the lease is three years beginning on January 1 with the rent due on December 31of each year? The
value of the leasehold is the present worth of one per period factor times the $24,800 payment.
Assuming that the $155 rental payments are at market and the correct capitalization rate is 12%, what
is the market value for the first year and the market value of the third year?
Present Worth 1 Per Period Factor = 2.401831
2.401831 X $24,800 = $59,565 is the taxable value of the leasehold for the first year.
Present Worth 1 Per Period Factor = 0.892857
0.892857 X $24,800 = $22,143 is the taxable value of the leasehold in the third year
•
If the same farmer leases the adjoining 160 acres from its owner, the State Department of
Transportation, for $155 per acre, how would the 160 acres be valued?
These 160 acres would be valued and assessed as farmland under its Productivity Indices.
•
A church rents an adjoining lot to a private business for use as the business’s parking lot. The terms of
the lease stipulates rent for the lot is $18,000 per year with the length of the lease being 5 years. The
market value for the first year of the taxable leasehold is:
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The church’s adjoining lot would lose its exempt from taxation status because the lot was not used for
religious or church-related activities and was leased by the church for a profit. The major limitation on
the property tax exemption for property used for religious purposes is that the property cannot be
leased or otherwise used with a view to profit (35 ILCS 200/15-40). If a property is so leased, the
exemption would not apply. However, leasing alone does not divest property of its exempt character
unless it is leased with a view to profit. People ex. rel. Goodman v. University of Illinois Foundation, 388
111. 363, 58 N.E.2d 33 (19M); Annot., 157 A.L.R. 860 (1945).
•
The federal government leases a 5,000 square foot industrial building to a private storage firm. The
length of the lease is for 5 years and the rent for the first year is $10,000. The rents increase 3% per
year for years 2 through 5. Assuming the rents are considered at market, what is the present value of
these annual earnings discounted at a rate of 12% per year?
Because the annual income changes from year to year, we must use column 4 in the financial tables
(Present Worth of $1) to apply each year’s factor to the annual income and total the resulting terms.
Annual Rent
Factor
Present Value
1
$10,000
0.892857
$ 8,929
2
$10,300
0.797194
$ 8,211
3
$10,609
0.711780
$ 7,551
4
$10,927
0.635518
$ 6,944
5
$11,255
0.567427
$ 6,386
Total
$38,021
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Developer’s Relief Preferential Assessment
(35 ILCS 200/10-30)
Section 10-31 expired on December 31, 2011 and was not reauthorized. The Developer’s Relief Preferential
Assessment found in Section 10-30 has been in effect since January 1, 2012.
Note: Occasionally, assessment practice is cited as following Section 20g4 of the property tax code. However,
that citation has not been valid since 1993 and the current statutory authorization is found in Section 10-30.
Properties qualifying for this preferential assessment are classified as 0039 (residential), 0059 (commercial), or
0089 (industrial). In order to determine if a property qualifies for valuation under this section, a four-step test
is used:
•
Is the land part of a legal subdivision that was recorded on or after January 1, 1978? In analyzing
whether Section 10-30 is applicable to a specific property, the date a document is recorded is always the
date to consider. If you are not certain when a subdivision was recorded, you can call Deb Ungs in our
office at (815)319-4477 or e-mail her at [email protected] to find out. For purposes of this act, a
subdivision must conform to the Illinois Plat Act.
•
Did the plat contain at least 5 acres? The area to consider is the entire boundary of the subdivision, which
may or may not include adjoining public right-of-way. Also, it can include only the area of that specific
subdivision; adjoining plats cannot be aggregated for this purpose. If you need help determining the area
of the subdivision, please contact Deb Ungs.
•
Since the date the plat was recorded, has the lot remained unimproved and unused? If a lot has been
improved with a habitable structure or used for any business, commercial, or residential purpose, its land
value should be removed from this classification on the January 1 following the improvement or use.
•
Has the property remained unsold (except for sales recorded between January 1, 2009 and December
31, 2011)? If a lot has sold, except for sales that were recorded between January 1, 2009 and December
31, 2011, its land value should be removed from this classification on the January 1 following the date the
sale was recorded.
For example, if a developer sold to another developer in 2011 and the county maintained the preferential
assessment for that parcel pursuant to section 10-31, then this preferential assessment would still carry
forward into 2012, although section 10-31 has expired. Point being, that the transfer in 2011 did satisfy the
law at the time.
If a lot meets these conditions, it should be given one of the classifications above and valued under this
section. If it does not meet these conditions, it shall not be valued under this preferential assessment and
should be valued at the same percentage of fair cash value as other property in the jurisdiction.
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To determine the correct valuation method, one additional factor needs to be determined:
•
When the most recent assessment of the underlying property (prior to platting) was certified to the
Board of Review, was the underlying property classified as farmland? If so, the platted parcels shall be
valued as farm parcels, EVEN IF THE PROPERTY IS NO LONGER FARMED. (See Mill Creek Development, Inc.
v. Property Tax Appeal Bd. of State of Illinois, 3 Dist.2003, 2003 WL 22462636, superseded 281 Ill.Dec.270,
345 Ill.App3d 790, 803 N.E.2d891, modified on denial of rehearing.)
This would normally mean developing a “farm card” for each platted lot in a subdivision. However, it has
been determined that in order to ease the administrative burden, it is permissible to assess each lot at
$100 assessed value.
•
When the most recent assessment of the underlying property (prior to platting) was certified to the
Board of Review, was the underlying property classified as something other than farmland? If so, the
platted parcels shall be valued according to the prior use of the underlying property, as if the subdivision
and any appurtenant improvements did not exist. This does NOT mean simply a discounted value, but a
proportionate value of land underlying the subdivision as if the subdivision did not exist as of January 1,
2014.
For more information, please e-mail Rose Jackson at [email protected] or call her at (815) 319-4472.
Mobile Homes
Under current legislation Mobile (Manufactured) homes placed outside of mobile home parks must be
assessed and taxed as real property starting January 1, 2011. Mobile homes taxed as privilege tax on this date
will continue to be taxed as privilege tax until the home is sold, transferred or until the home is relocated to a
different parcel of land outside of a mobile home park. The owner of each inhabited mobile not located
inside of a mobile home park shall within 30 days after Jan 1, 2011 file with the township assessor a mobile
home registration form containing specific information & shall record a signed copy of title or the certificate
of origin in the county where the home is located. They can also opt to surrender the signed title or
certificate of origin to be held by the county until the home is removed from the county.
Mobile Home Park Definition- tract of land or two contiguous tracts of land containing sites & necessary
utilities for 5 or more mobile homes. Mobile Home park owners are responsible for notifying township
assessors when mobile home occupants within the park change. That notification is to be within 30 days of the
change.
From time to time the question arises as to whether a senior citizen can qualify for the Senior Homestead
Exemption if he or she owns a mobile home and it is on privilege tax. The senior can receive a senior
homestead exemption on the privilege tax through the county clerk’s office as well as an owner occupied
exemption. They cannot however, receive the senior freeze per the Illinois Department of Revenue.
Mobile Homes used for office space, such as on construction sites, are not taxable.
For further information about mobile homes, please e-mail Diane Roberson at [email protected] or call
her at (815)319-4474.
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Farmland Assessments
Pursuant to the Property Tax Code 35 ILCS 200/10-110 thru 10-145, farmland in Illinois is assessed for property
tax purposes on the basis of its agricultural economic value. This value, commonly referred to as use-value, is
based upon land use under average level management, relative productivity of soils, and the present worth of
the net income accruing to the land from farm production.
Legal Requirements
When used in connection with valuing land and buildings for an agricultural use, the state Property Tax Code
considers property to be a farm if one of the following uses is the principal use:
•
•
•
•
The growing and harvesting of crops.
The feeding, breeding and management of livestock.
Dairying or for any other agricultural or horticultural use or combination thereof; including, but not
limited to, hay, grain, fruit, truck or vegetable crops, floriculture, mushroom growing, plant or tree
nurseries, orchards, forestry, sod farming and greenhouses;
Keeping, raising and feeding of livestock or poultry, including dairying, poultry, swine, sheep, beef
cattle, ponies or horses, fur farming, bees, fish and wildlife farming.
(See 35 ILCS 200/1-60)
Also, to qualify for a farm assessment, the farm use must have been established for at least two years
preceding the date of assessment and the farm use must continue into the current year. For 2016
assessments, a qualifying property must have established a farm use as the principal use no later than 2014
and must be used for an agricultural purpose during 2016. (See 35 ILCS 200/10-110)
If a farm use is conducted during 2016 and the use is changed to a non-farm use during 2016, the land
assessment will be prorated according to the portion of the year the land was used for farming and the
portion it was used for a non-farm purpose. For example, if a farm use is conducted on the parcel from
January 1, 2016 until October 15, 2016 when work is started to convert the use to non-farm, the parcel would
receive the farm use assessment for 9 ½ months and the market value assessment for 2 ½ months.
Finally, the property tax code requires that the definition of farm use “does not include property which is
primarily used for residential purposes even though some farm products may be grown or farm animals bred
or fed on the property incidental to its primary use.” In other words, if there is a residential use on a property
(such as a single-family home), a farm assessment cannot be granted unless a majority (more than 50%) of the
property has been established as farm use.
In setting the assessment on a farm parcel, local assessing officials must consider four separate parts of the
farm. Each of these parts and their statutorily prescribed method of assessment, are as follows:
A. Farm Home site: This is defined as that land on a farm parcel being used for residential purposes. The
home site is assessed as all other residential land in the county. The market value would be whatever
comparable rural residential land is selling for in the area. Be sure to consider all the influences the
specific farm property has by being located on a farm. These influences may necessitate an
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adjustment to values arrived at by analyzing sales that were not exposed to those farm influences.
This part of the farm parcel assessment is subject to county and state equalization factors.
B. Farm Residence: This is to be assessed as all other residential improvements in the county. This part
of the farm parcel assessment is also subject to county and state equalization factors. Be sure to
consider all the influences the specific farm property has by being located on a farm. These influences
may necessitate an adjustment to values arrived at by analyzing sales that were not exposed to those
farm influences.
C. Farm Buildings: These are assessed at 33⅓% of their contributory value to the productivity of the
farm. Contributory value considers the current use of the improvements and what that use adds to the
overall productivity of the farming operation
D. Farmland: This is assessed according to its soil productivity considering farmland use and factors
which may detract from productivity. The state computes soil productivity index use-value assessment
figures as a basis for the local assessment of individual parcels.
Cropland is assessed according to the value of its adjusted soil productivity index (PI).
Permanent pasture is assessed at one-third of its adjusted PI assessed value as cropland.
Other farmland is assessed at one-sixth of its adjusted PI assessed value as cropland.
Wasteland is assessed at its contributory value.
For 2016, the farm land assessments will increase by 10% of the 2015 equalized assessed value of soil with a
productivity index of 111 (the median productivity index of cropped soil in Illinois). That increase will be
$21.86 per acre for all the productivity indexes for which the Illinois Department of Revenue certifies values.
For more detailed information on Farmland Assessment, the Department of Revenue has developed the
following publication:
Instructions for Farmland Assessments ...... http://tax.illinois.gov/Publications/Pubs/Pub-122.pdf
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Assessment Change Requests (ACRs)
What is it?
An Assessment Change Request (ACR) is a request that the Board of Review, on
its own motion, adjust an equalized assessed valuation (EAV) that has been
previously certified to the Board of Review.
Who can request it?
It can be requested by a Township Assessor or the Supervisor of Assessments.
Taxpayers or taxing bodies must use the complaint process as provided in the
Illinois Property Tax Code (35 ILCS 200/16-25 and 35 ILCS 200/16-55,
respectively).
When can it be requested?
It cannot be filed prior to the date the Township Assessment Roll is certified to
the Board of Review. All requests need to be in the Board of Review office by
the final deadline set by the Board of Review. (December 31, 2015 for the 2015
assessments).
Why is it used?
It is designed to provide a mechanism wherein an assessing officer can request
a change for an EAV after further information has been brought to the assessing
officer’s attention. It is not a suitable vehicle for changes to entire
neighborhoods, nor is it a substitute for the normal mass appraisal process.
What is the process?
If the Board of Review concurs, the taxpayer will be notified in writing that the
Board has made this change on its own motion pursuant to 35 ILCS 200/16-30;
if the requested change is for a reduction of $33,333 or more, the Board of
Review will conduct a meeting with the Township Assessor requiring evidence
to justify a reduction of that value, the taxpayer may attend, but it is not
required. If the requested change is $100,000 or more, all taxing bodies with a
revenue interest will be notified. If the taxpayer or taxing body with a revenue
interest requests a hearing within 14 days of the notice, a hearing will be held
on the proposed change. Please remember that an Assessment Change Request
updates only the current assessment year.
What if there is an
Assessment complaint?
If a taxpayer has filed an assessment complaint with the Board of Review, the
Assessment Change Request (ACR) will serve as the Township Assessor’s
recommendation to the Board of Review.
How should it be filed?
ACR forms will be available in the Supervisor of Assessments office. All ACRs
must be made using this form.
Questions?
For more information, please contact
[email protected] or call (815) 319-4472.
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Rose
Jackson by e-mail
at
Notice of Destruction Calculations
When calculating an assessment change due to a fire of other natural disaster, the assessor should send the
taxpayer of the affected parcel(s) the Notice of Destruction Form (see attached).
The taxpayer, should then fill in their portion of the form and return it to the Township Assessor.
The assessor then completes their designated portion of the form, calculating the assessed value before and
after the fire, (the assessor does not have to prorate this) and include the date of the fire (if known or
estimated), and return it to the Supervisor of Assessments Office.
In the event the taxpayer does not return the form with their portion completed to the township assessor, the
assessor will need to make a site visit to determine the percentage and date of destruction and the date the
reconstruction was completed, if possible. Should the assessor be unable to determine the percentage of
destruction, they should contact their local fire jurisdiction for additional information. The form, with their
portion completed, should be sent to the Supervisor of Assessments Office.
Upon receipt, the Supervisor of Assessments Office will pro-rate the value based on the date of destruction
and reconstruction (if applicable). A notice will then be sent to the taxpayer with the revised value.
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Certificates of Error
(35 ILCS 200/14-20 and 35 ILCS 200/16-75)
What is it?
A Certificate of Error is the instrument that corrects an error in fact (not an error
in judgment), and should be submitted to correct the PRIOR YEAR’S
ASSESSMENT and the CURRENT YEAR’S TAX BILL.
Who can request it?
Only Assessment Officials may request a Certificate of Error. In Illinois,
taxpayers have neither a statutory nor a constitutional right to participate in a
certificate of error procedure (Ball v. County of Cook, 385 Ill.App. 3d at 105,
citing In re Application of the Cook County Treasurer for the 1968, 1973, 1980 &
Other Tax Years, 172 Ill. App. 3d 192, 199 (1988), citing, Chicago Sheraton Corp.
v. Zaban, 71 Ill.2d 85 (1978)). The certificate of error procedure is separate and
distinct from the refund procedure available to the taxpayer (Ball, 385 Ill. App.
3d at 105, citing Chicago Sheraton Corp., 71 Ill. 2d at91). Taxpayers do not have
a private cause of action under section 14-15 of the Property Tax Code (Ball,
385 Ill. App. 3d at 105, citing Chicago Sheraton Corp., 71 Ill. 2d at 91). The
Supreme Court has held that “the General Assembly intended the certificate of
error procedure to be an expeditious summary process, without participation
by the taxpayer, for correcting the assessor's errors” (Chicago Sheraton Corp.,
71 Ill. 2d at 91).
When can it be requested?
A Request for Certificate of Error to correct a 2015 assessment and a 2016
property tax bill can be submitted to the Supervisor of Assessments no earlier
than April 1, 2016 and no later than the date of the order of judgment for the
2015 Tax Sale. This date is expected to be in the later part of October 2016.
Why is it used?
A Certificate of Error is used to correct an error in fact; the state property tax
code prohibits a Certificate of Error to be made based on “errors of judgment as
to the valuation” (35 ILCS 200/16-75). Bases for a Certificate of Error identified
by the Illinois Department of Revenue include:
•
•
•
•
•
What is the process?
Incorrect computations;
Duplicate assessments,
Improvements damaged or destroyed by accidental means;
Incorrect description of property assessed; and
Unapplied homestead exemptions.
The property tax code provides that Certificates of Error can be issued by a
Chief County Assessment Officer with the concurrence of a majority of the
Board of Review (35 ILCS 200/14-20). The property tax code also provides that
they can be issued by the Board of Review with the concurrence of the Chief
County Assessment Officer (35 ILCS 200/16-75).
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In order to insure compliance with statutory requirements, the request must:
•
•
•
•
State the nature of the error in fact (other than error of judgment to
valuation);
Provide the valuation before the error and the corrected valuation
breakdown: land, improvements, and total;
Include evidence of before and after showing the reason for issuing the
Certificate of Error; and
Be signed by the Township Assessor or designee.
Remember, a Request for Certificate of Error corrects the PRIOR year’s
assessment; it does not correct the current year’s assessment. If the current
year’s assessment needs to be corrected also the assessor must put the
corrected valuation on the current year’s assessment roll. If you have already
certified your assessment roll to the Supervisor of Assessments office then you
must correct the valuation through a Request for Revised Assessment form.
What if there is a pending
Appeal to the PTAB?
The Illinois Attorney General has opined that “Once a decision of a county board
of review is appealed to the Property Tax Appeal Board, the board of review has
no power to issue a certificate of error to alter its assessment.” (1977
Op.Atty.Gen. No. S-1307). Therefore, any recommendation for change should
be included in a response to the filing at the PTAB.
How should it be filed?
A Request for a Certificate of Error form will be available at the Supervisor of
Assessments Office. All Certificates of Error must be made using this form.
Questions?
For more information, please e-mail Terri Reeves at [email protected] or call
her at (815)319-4467,
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