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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. The Productivity Index is simply a relative
number in comparison to other soils. Bulletin 810 is similar but
not identical to Bulletin 811. Bulletin 811 is often used to
indicate how productive a farm is for farmland sales. The PI
Index numbers in Bulletin 810 are lower than those in Bulletin
811, and some confusion exists among taxpayers over the
differences. Farm owners can look up the soil types on their
farms at many of the local county GIS websites. The soils are
listed on what is typically called the farm card or linked
online under farmland. The county assessor's office can assist
if a county does not have a website with the farm soil
information.
Illinois law states that the property must have been used as a
farm for the previous two years to qualify for a farmland
assessment. The statute defines a farm as any property used
solely for growing and harvesting crops or livestock/poultry
farming. A farmland assessment will not be given to property
used for residential purposes, even though some farm products
may be grown for incidental agricultural use.
Who Determines My Farm Assessment
The assessment of farmland is the responsibility of your local
county assessor. However, by law, specific responsibilities have
been assigned to the State of Illinois, particularly the
Illinois Department of Revenue (IDOR). For example, the IDOR
must calculate soil productivity index use-value figures (rating
the soils of the state along with profitability) and certify
them to county officials yearly. These officials then apply the
statistics to the identified soil types on individual farms or
parcels of farmland to establish an assessment. Soils across the
state and your farm can vary significantly. The IDOR controls
the income calculations of your farm’s soil type when
determining the income assigned to your farm, not your local tax
assessor. Your local tax rates are based on the number of taxing
entities within the jurisdiction of your farm location and the
assessment charge those entities receive. The assessments are
set through referendums, and the levied tax rate is determined
locally.
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Why Did My Farm Property Tax Go Up or Down
Higher farm profitability triggers a higher property tax on farms,
while lower profitability can reduce the tax burden. As previously
discussed, Illinois farm property taxes are determined on a
five-year average of farm profitability. Over five years, higher
income years can offset a lower farm profit year. There is also a
two-year lag, which accounts for the slow adjustment of farm
property taxes. 2025 property taxes will be paid on 2024
calculations, accounting for 2023 farm income. Thus, it takes seven
years to fully adjust to everchanging farm economic conditions.
Please contact the Illinois Department of Agriculture or your local
County Assessor's Office for more information.
About Extension
University of Illinois Extension develops educational programs,
extends knowledge, and builds partnerships to support people,
communities, and their environments as part of the state's
land-grant institution. Extension serves as the leading public
outreach effort for University of Illinois Urbana-Champaign and the
College of Agricultural, Consumer and Environmental Sciences in all
102 Illinois counties through a network of 27 multi-county units and
over 700 staff statewide. Extension’s mission is responsive to eight
strategic priorities — community, economy, environment, food and
agriculture, health, partnerships, technology and discovery, and
workforce excellence — that are served through six program areas —
4-H youth development, agriculture and agribusiness, community and
economic development, family and consumer science, integrated health
disparities, and natural resources, environment, and energy.
COLLEGE OF AGRICULTURAL, CONSUMER & ENVIRONMENTAL SCIENCES
University of Illinois | U.S. Department of Agriculture | Local
Extension Councils Cooperating University of Illinois Extension
provides equal opportunities in programs and employment. If you need
a reasonable accommodation to attend, call the registration office.
Issued in furtherance of Cooperative Extension work, Acts of May 8,
and June 30, 1914, in cooperation with the US Department of
Agriculture by the Director, Cooperative Extension Service, and
University of Illinois.
[Kevin Brooks
University of Illinois Extension
Farm Business Management and Marketing Educator]
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