By Kevin Brooks
Understanding Illinois property tax calculations is complex and confusing. Properties such as personal residences are taxed based on fair market value. The State of Illinois assesses farmland based on the agricultural use value rather than the farm market value. Based on farm income generation, this system prevents wide fluctuations yearly and is intended to better serve the farm taxpayers and entities who rely on local property taxes. The farm income for calculating tax bills is based on a five-year average, which keeps the system more stable. High profits in the earlier part of this decade would have triggered higher tax rates if the tax bills were adjusted immediately. Conversely, lower farm profits will be reflected more slowly in tax bills.
Government agencies and schools in low-population counties depend more on farm property taxes than those in more urban counties. Year-to-year stability is important, and the current property tax code provides the framework for agricultural economic stability. Farm tax assessments are based on land use under average-level management, the relative productivity of soils, and the present value of the net income assigned to the land from farm production. The profitability of your soils directly impacts how much you pay in farmland property taxes.
Farm Productivity Index in Tax Calculations for Farmland
In Illinois, farmland productivity is based on Bulletin 810, which assigns index numbers relative to soil productivity. This article provides a general and straightforward explanation, and more detailed information can be found through your local county assessor's office.
Source : illinois.edu