SPECIAL REPORT
Illinois' biggest local tax
is based on an official
estimate of what your
property is worth.
Because of this element
of judgment, the tax is
difficult to administer
fairly and is open
to an unusual degree of
political manipulation.
The three articles that
follow describe the ABC's
of assessments, how to
protest an unfair
assessment, and how
politics enters into
intercounty equalization.
A fourth article looks
into who pays state taxes
and who draws benefits
Assessment is first step
in property tax process
THE APPRAISAL or "assessment" of
the value of taxable property is the basis
of the property tax system. This process
is performed in Illinois for most kinds
of property at the township and county
level, but some assessments are also
made at the state level. The assessed
value of all taxable properties in the
state totals approximately $50 billion.
As provided under the 1970 Constitution and in the General Revenue Act, three steps are involved in the administration of the property tax: (1) assessment of property subject to taxation, (2) calculation of tax rates by the county clerk in each county and extension of taxes by him against the property owner, and (3) collection of taxes. The most important of these three steps is the assessment of property.
Who are the assessors?
In all counties under township
organization (except Cook and St.
Clair) the townships elect assessors who
make the original assessments in their
townships, and the assessments, when
complete, are returned to the supervisor
of assessments. The supervisor of
assessments will be discussed more
thoroughly later in this article. The
supervisor of assessments has the same
authority as the township assessor to
assess and make changes in the assessment of property, and may assess and
make changes or alterations in the
assessment of property as though
originally made (Illinois Revised
Statutes, chapter 120, section 576).
In the 17 counties not under township organization ("commission" counties), the county supervisor of assessments is the county assessor and makes the original assessment (ch. 120, sec. 484).
Two counties under township organization receive special treatment. They are Cook County in which Chicago is located and St. Clair County in which East St. Louis is located
In St. Clair County an elected board of assessors consisting of five members makes the original assessments, and in all townships in that county not lying wholly within the limits of one city, the township assessor is ex officio deputy assessor to make the assessments in the township wherein he is elected (ch. 120, sees. 485, 486).
Cook County comes under a special act and has an elected county assessor. The township assessors are ex officio deputy assessors and under direction and control of the county assessor (ch. 120, sec. 487).
Supervisors of assessments
In all counties of the state except
Cook and St. Clair, the office of supervisor of assessments or county assessor
filled by appointment by the county
board. The person chosen or appointed
by the county board must be qualified
by virtue of experience and training in
the field of property appraisal and
property tax administration, and he
must pass an examination conducted by
the Department of Local Government
Affairs. The appointment is made by
the county board from one of three persons attaining the highest passing grade
in the examination (ch. 120, sec. 484a).
The term of his office is four years from
the date of appointment and until a
successor is appointed and qualified.
The supervisor of assessments has the same duty to make assessments as does the local assessor. He is clerk of the board of review, prepares and maintains tax maps and up-to-date lists of property owners' names and addresses on property record cards, keeps track of the transfers of real estate, and seeks out omitted property to be placed on the tax rolls by the board of review. Any two or more counties with the approval of the Department of Local Government Affairs may appoint the same person as their county supervisor of
176/Illinois Issues/June 1975
assessments, and may by agreement provide for the appropriate share of his salary.
All real estate is assessed every four years, and this is called the "quadrennial assessment." In all township organization counties of the state, except Cook, 1975 is the year of the quadrennial assessment. A special statute applying to Cook County provides that Cook County is divided into four equal districts or quadrants, and one quadrant has its quadrennial assessment each year (Ill. Rev. Stat., ch. 120, sec. 524).
In each year of the quadrennial assessment, the county clerk has the duty of making up the assessment books of all real property for the local assessors. On or before January 1 of the quadrennial assessment year, the assessors (in person or by deputy), are required to view and determine the value of each tract or lot of land listed for taxation as of January 1 and assess the land at its fair cash value ("fair cash value" is defined by statute as 50 per cent of actual value in ch. 120, sec. 482, 501). The value of lands and improvements must be separately fixed and placed in the separate columns in the assessor's books.
In the 17 commission organized counties the last quadrennial assessment year was 1974, and the next one will be in 1978.
The 1970 Illinois Constitution (Article IX, sec. 4) allows counties with a population of 200,000 or more to classify or to continue to classify real property for purposes of taxation. Any such classification must be reasonable and the assessment must be uniform within a class. The level of assessment or rate of tax of the highest class in a county which classifies may not exceed two and one half times the level of assessment or rate of tax of the lowest class in that county. Real property used in farming in such a county may not be assessed at a higher level of assessment than single family residential real property in that county. Cook County is the only county at this writing that classifies real estate for taxation purposes. The county board has classified the real estate in Cook County into five general classes. Real estate in all the other counties in Illinois is assessed and taxed uniformly by valuation, ascertained as the General Assembly provides by law.
Railroads are assessed by the state, and a few years ago the railroads contended they were assessed at higher levels than local assessments. Many of these cases went to the Supreme Court and in 12 instances the railroads won
The assessment of personal property in Illinois is still a confused picture. Before the new Constitution was adopted by the electors in 1970, an amendment was submitted to the old Revenue Article of the former Constitution to abolish the assessment of personal property owned by individuals. This amendment was tied up in the courts for a few years, and as a result of the outcome, the personal property tax still applies to business, industry, partnerships, estates, trusts, and certain fiduciaries. More court issues will be lurking farther down the road, however, because under the provisions of the new Constitution, all remaining personal property taxes have to be abolished by the General Assembly on or before January 1, 1979. Concurrently, with this abolishment the General Assembly is directed by the new Constitution to replace all revenue lost by units of local government and school districts by imposing statewide taxes on those classes of property relieved of the burden of the personal property tax.
Anyway, every owner of taxable personal property still subject to the property tax in- Illinois (or his agent or representative) has the duty of listing this property by April in each year on a schedule furnished by the local assessor. The person listing such personal property is required to sign and swear to the schedule (the swearing is often dispensed with by practice), and to return the schedule to the assessor who is required to assess the property at its fair cash value. It should be remembered that listing valuations of personal property by the owner on a schedule does not constitute the assessment; this is simply an aid to the assessor in making the assessment. The general rule is that personal property is subject to assessment in the taxing district in which the owner resides; but the General Revenue Act contains a number of exceptions, and it is this writer's advice that anyone interested in the subject should check the act for such exceptions.
Although most assessing is done by local assessors, the state Department of Local Government Affairs (DLGA) has the duty of assessing some forms of property. The DLGA assesses all property owned or used by railroads operating within Illinois (except non-carrier real estate which is assessed by local assessors), the operating property of private car lines, and the capital stock including the franchises of all companies or associations incorporated under laws of this state (except that companies organized for purely manufacturing and mercantile purposes, or for either of such purposes, or for the mining and sale of coal, or for printing, or for the publishing of newspapers, or for the improving and breeding of stock, or for the purpose of banking, or as mutual building, loan and homestead associations are all assessed by local assessors).
In assessing capital stock, the DLGA or local assessment officer, as the case may be, must ascertain the fair cash value of the capital stock over and above the assessed value of the tangible property. The latter assessed value must be deducted in order to avoid double taxation. Intangible personal property of the corporation is a part of capital stock and is subject to assessment as such. In all cases where the tangible property or capital stock of any corporation is assessed under the Revenue Act, the shares of such company which represent its taxed capital stock are exempted from taxation to avoid double taxation. This position has been sustained by the Illinois Supreme Court.
The term "capital stock" may be described in the colloquial as the corporate excess. The capital stock of domestic corporations must be assessed and taxed, but the capital stock of June 1975/Illinois Issues/177
When the assessments of capital stock made by the DLGA are finished, the department is required to publish them in the state's official newspaper. Any corporation dissatisfied with its assessment may, within 10 days of the date of the DLGA publication, apply to the department for review and correction of the assessment (ch. 120, sec. 618).
Railroad property is assessed by the Department of Local Government Affairs except for non-carrier real estate which is assessed by the local assessment officers. When the assessments of railroad property are finally determined by the department, the assessments are distributed among the several taxing districts in the state in proportion to the length of the track owned or used in each taxing district compared to the whole length of all track owned or used in the state. It is interesting to note that that they were assessed at higher levels by the DLGA than would have been made by local assessors, even after equalization. Many of these cases went to the Illinois Supreme Court, and in. some 12 instances the railroads were able to prove their case.
Property assessed annually
In addition, personal property that is still subject to assessment is assessed every year, and so this assessment is really a continuing duty of the assessor.
Publication of assessments
What happens if there is a failure to publish the assessments as required by the statute? Such failure does not render the assessment void, because notice to the property owner is not a condition for the validity of the original assessment (Grant Land Association v. People, 213 III. 256). The purpose of the publication of assessments is to provide the taxpayer with a notice of his current assessment, and the opportunity to compare his assessment with those of his neighbors, providing however, that the assessments are of comparable property. If the taxpayer, after such examination, is of the opinion that his assessment is too high or out of line with that of his neighbor, the statute provides for him a method of protesting his assessment; see "How to file an appeal if assessed unfairly" in the next column. ¯
By MAURICE W. SCOTT
WHEN AN assessor values taxpayer A's home at 50 per cent of its value but values taxpayer B's comparable home at 20 per cent of its value, naturally taxpayer A is up in arms and wants to know where he must go to complain. He must go to his county board of review in downstate counties and to the County Board of Appeals in Cook County.
The board of review consists of three members. It meets on or before the third Monday of June in each year for the purpose of revising the assessments returned to it by the county assessor, supervisor of assessments, or board of assessors, as the case may be. At this meeting the board, upon the application of any taxpayer, or upon its own motion, may change or review the assessments of any taxpayer, but in no case may the assessment of any person be increased unless that person has had notification.
It should be remembered that if taxpayer A above is interested in filing his complaint before the board of review, such complaint to affect the assessment lor the current year must be filed on or before August I in counties with less than 150,000 inhabitants, and on or before September I in counties with 150,000 or more but less than 1,000,000 inhabitants. (A different process—not described here—applies in Cook County.) Such complaints must be in writing and filed in duplicate. The duplicate then goes to the local assessing officer. Taxpayer A should ask for a hearing so that he can present evidence when his complaint is heard. The best evidence in seeking relief is that his assessment is out of line with assessments of comparable property in the same neighborhood (Illinois Revised Statutes chapter 120, section 589).
Taxpayer A should proceed first before his county's board of review, because the courts are reluctant to give any relief unless the taxpayer has first exhausted his administrative remedy before the board of review (People ex ret Nordlund v. Lans, 31 III. 2d 477).
In Cook County the reviewing body is called the Board of Appeals. It is not authorized to make changes in the assessment books, but it may order the assessor to do so. This board can only act upon complaints filed with it by taxpayers.
When the review of assessments is completed by the board of review or by the Board of Appeals, the assessments are then certified to the county clerk.¯
178/Illmois Issues/June 1975
foreign corporations is not subject to assessment in Illinois because of a decision in a court case (Hart v. Thoman, 373 Ill. 462).
In each year other than the year of the quadrennial assessment, the assessor has the duty of listing and assessing all real estate which becomes taxable for the first time and adding on all new or added buildings and structures not assessed before. In addition, if there has been a destruction or depletion of property, he has the duty of taking this off the assessment rolls. The assessment officers have the power, in years other than the year of the quadrennial, to reassess real property whenever acreage property has been subdivided into lots and the subdivision has been recorded in the office of recorder of deeds in any county.
Upon the completion of local assessments in all counties (except Cook) in the year of the quadrennial assessment of real property, a full and complete list of the assessments of real and personal property must be published (by townships if the county is so organized). In years other than the quadrennial assessment, a list must be published of real estate for which assessments have been added or changed since the last assessment and a separate list of personal property assessments. The Revenue Act has a similar provision in respect to the publication of the assessments in Cook County.
How to file an appeal if assessed unfairly