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New EXEMPTIONS for 2009

In Illinois, taxpayers now pay property taxes only on their real property. Personal property tax for individuals was eliminated by the 1969 law that instituted the Illinois Income Tax. Corporations, partnerships, limited partnerships, joint ventures, and similar entities continued to pay taxes on personal property until 1979. These business entities now pay a replacement tax on income or invested capital. Business entities pay this tax to the department, who distributes the monies to time local taxing districts in proportion to the amount received previously from the personal property tax.

Property taxes are raised, spent, and distributed locally. Property taxation produces more than three-fourths of the total tax revenue and finances a major part of the services provided by local governmental units which benefit citizens and their property. The largest share of the property tax goes to school districts.

Property tax is a tax that is based on the value of the property owned, and is assessed according to its value. For this reason it is often called an ad valorem tax. Value is a complicated concept with many definitions. Most real property in Illinois must be assessed based on its value in the open market. Market value is the most probable sale price of a property in terms of money in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale, and assuming that the transaction is not affected by undue pressure.

The determination of market value for tax purposes is the job of assessors, who use one or more of the following three basic approaches to estimate market value:

1 sales comparison, or market approach -- calculating the value of properties by observing and analyzing the selling prices of comparable properties;

2 cost approach -- calculating the cost of replacing the improvements, subtracting accrued depreciation, and adding land value; and

3 income approach-- calculating the present worth of the income from an income-producing property.

The determination of market value requires skilled and knowledgeable assessing officials. To encourage assessing officials to improve their knowledge and skill in determining value, the state pays a stipend to any chief county assessment officer (CCAO), township assessor, deputy assessor, or member of a board of review, who earn certain professional designations and continue their education each year.

The property tax cycle

The property tax cycle - from the assessment of propert_y to the collection and distribution of taxes takes nearly two years for most property. Some steps take place concurrently, but basically it can be d/vided into six steps.

I assessment                           4 levy

2 review                                  5 extension

3 equalization                          6 collection and distribution

The assessment cycle

The assessment cycle begins with the creation of the assessment books and ends with the review of the assessments by the board of review. The assessment cycle takes from nine to twelve months to complete, depending on the size of the county and the number of assessment complaints filed with each board of review. The steps in the assessment cycle are:

1 assessment,

2 review, and

3 equalization.

Assessment

An assessment involves four steps:

1 identifying the real property within a jurisdiction,

2 listing it,

3 appraising it, and

4 placing a value for it on the tax rolls.

This value is known as the assessment and is the basis for determining what portion of the total tax burden each property owner will boat In Illinois, the statutory assessment level is one-third ( 33 I/3 percent ) of market value, unless set otherwise by law.

Most property is locally assessed by township and county officials. In all counties except Cook and the 17 commission counties, township or multi-township assessors have primary assessment responsibility. There are over 900 elected assessors in Illinois. Assessors must qualify to hold office on the basis of prescribed course work in assessment techniques.

In the 17 commission counties -- Alexander, Calhoun, Edwards, Hardin, Johnson, Massac, Menard, Morgan, Monroe, Perry, Pope, Pulaski, Randolph, Scott, Union, Wabash, and Willamson -- that have no township level of government, the supervisor of assessments has the primary assessment responsibility. In Cook County, the county assessor takes the primary responsibility for the assessment of property.

Supervisors of assessments and county assessors axe referred to as chief county assessment officers (CCAO). The work of township and multi-township assessors is subject to review and, if necessary, revision by the supervisor of assessments. The supervisor of assessments is usually appointed by the county board. The supervisor of assessments must have two years of relevant experience, pass a qualifying examination administered by the department, and possess a professional appraisal designation specified in the statutes. Some counties have an elected county assessor or supervisor of assessments.

A few types of property are assessed by the state, such as railroad operating property; railroad right-of-way and track, and pollution-control facilities that have been certified as such by the Illinois Environmental Protection Agency. The value of state assessed property is a small percentage of the value of all taxable property. State assessed property is valued by the department and these assessments are certified to the appropriate county clerks for inclusion in local tax bases.

In Illinois, property is to be viewed, inspected, and revalued once every four years in all counties but Cook, which has a three-year reassessment cycle. Between these quadrennial assessments, assessors may revalue any property whose value has changed or is incorrect. Farm acreage must be reassessed annually

The assessment date in Illinois is January 1, On that date, the assessment cycle begins for all real property which must be valued as to its condition at that point and time. The Property Tax Code requires that on or before this date, the CCAO call on the county clerk to receive the assessment books listing all parcels of real estate to be assessed in each of the townships in the county. The assessment book has columns for the property index number (PIN), the name of owner, the assessment by the township assessor, the assessment by the CCAO, and the assessment by the board of review for each parcel. The CCAO conducts a meeting with the township assessors to give instructions to the assessors, inform them of any changes, and give them the assess-merit books.

Procedures for the establishment of farmland assessments begin on May 1, in the year prior to the assessment date, with the certification of proposed values from the department to the CCAO. These values are used to make the assessments for the assessment year beginning on the following January 1st.

In non-commission counties, other than Cook and DuPage, township and multi-township assessors should complete their assessments by April 15. After assessors have certified their assessment books as being correct and complete, they return them to the CCAO, who has until the third Monday in June to examine the books and make any changes necessary to achieve fairness. Assessment books are then given to the county board of review for subsequent review and equalization.

Taxpayers have the right to inspect property record cards and other assessment records for any property, subject to reasonable rules and regulations established by local authorities.

Review and intra-county equalization are performed by the CCAO and the board of review. While both the CCAO and the board of review have the power to equalize, normally only one will do so. Review at this level is generally an informal review of the assessment roll Formal review on a complaint by the taxpayer take: place at the board of review.

The CCAO examines the assessment book and makes any changes that will make assessments more equitable. He or she may equalize assessments by applying a factor to all assessments for either a township, an area, or a class of property All assessments that have been changed from the previous assessment year must be published in a newspaper However, only the equalization factor must be published for properties that had assessment changes due solely to equalization. Individual notices must be mailed to taxpayers whose assessments were changed for any reason other than an equalization factor.

Any assessment change made by the CCAO is entered in his or her column in the assessment books. The CCAO certifies the assessment books to the county board of review by the third Monday in June, and corn-pries and sends a tentative abstract of assessments to the department. The department uses the information on the abstract to determine if the level of assessments has changed since the data for the department's sales ratio study was collected. The department then certifies a tentative inter-county equalization factor, often called a tentative state multiplier, to the CCAO and county clerk end holds a public hosting on the factor.

The board of review convenes on the first Monday in June in most counties, and completes its work during the period of September through December depending on the population of the county and the number of complaints filed with the board. The board has several important duties in the assessment cycle. For prior years, the board assesses property that was inadvertently omitted from the assessment rolls. They hear the formal complaints of taxpayers and make any necessary assessment changes. The board can also make individual assessment changes on its own volition. However, the taxpayer and township assessor must be notified of these changes and given an opportunity to be heard before the board.

In addition, the board reviews applications from property owners, such as churches, schools, and local governmental units who believe their properties should be exempt from property taxes. The board makes a recommendation to the department as to whether these properties should be exempt. The department makes the final determination. The board of review also equalizes assessments by township, area, or class of property and sends a report on equalization to the department.

Any assessment changes are entered in the board of review's column in the assessment books. Any change by the board of review, whether it is an individual assessment change or a change resulting from equalization, must be published and individual ml notices must be sent to the affected taxpayers. The board of review then certifies the assessment books to the county clerk.

Completion of the assessment cycle

After the county clerk receives the assessment books from the board of review, the clerk prepares an abstract of assessments that the department uses in the computation of the final equalization factor for the county. Once the county clerk receives the department's certification of the final equalization factor and the certification of the state-assessed railroad operating property and pollution control facilities, he or she applies the final equalization factor to the local assessments as certified by the board of review. This results in the equalized assessed value (EAV). These EAVs are the final values used to compute tax rates and to extend taxes. This completes the assessment cycle.