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Illinois

For the complete text of Illinois statutes and other property tax information please refer to the Illinois Department of Revenue.

Property Classification:

For classification purposes "forest land" falls under the general heading of farmland.

Farmland

A parcel of land used for agricultural purposes for two years is eligible for assessment as a farm (Property Tax Code, Sec. 10-110 [35 ILCS 200/10-110 ]).

Farm is defined as any tract of land used for one or more of the following uses:

1. for the growing and harvesting of crops;

2. for the feeding, breeding and management of livestock;

3. for dairying; or

4. 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; the 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 (Property Tax Code, Sec. 1-60 [35 ILCS 200/1-60 ])

A farm does not include property that is primarily used as a residence even though some farm products are produced on the property incidental to its primary use. Farmland subject to the ongoing removal of oil, gas, coal, or any other mineral will not lose its status as farmland.

Valuation and Assessment:

The value of farmland for assessment purposes is based on the productivity of the soil (Property Tax Code, Sec. 10-115 [35 ILCS 200/10-115]). Each soil type in the state is rated by the University of Illinois College of Agriculture according to its capability of producing crops. This rating is known as the "soil productivity index."

For each of these soil ratings, there is calculated a five-year average net income, derived by taking the average gross income per acre less the average production costs per acre. The net income for each soil productivity index is then divided by the five-year moving average of the Federal Land Bank farmland mortgage interest rate to yield the soil's "agricultural economic value per acre."

The "equalized assessed value" per acre of farmland for that soil productivity index is 33 1/3% of its agricultural economic value. Any increase or decrease in the equalized assessed value cannot exceed 10% of the preceding year's value.

Assessment level by type of farmland. (35 ILCS 200/10-125)

Farmland is further broken down into four classes for assessment purposes:

1. Cropland - which shall be assessed in accordance with the equalized assessed value of its soil productivity index as certified by the Department and shall be debased to take into account factors including, but not limited to, slope, drainage, ponding, flooding, and field size and shape.

2. Permanent pasture - which shall be assessed at 1/3 of its debased productivity index equalized assessed value as cropland.

3. Other farmland - which is neither cropland nor pasture shall be assessed at 1/6 the "equalized assessed value" as cropland.

Property under forestry management plan. (35 ILCS 200/10-150)

In counties with less than 3,000,000 inhabitants, any land being managed under a forestry management plan accepted by the Department of Conservation under the Illinois Forestry Development Act shall be considered as "other farmland."

In counties with more than 3,000,000 inhabitants, any land totaling 15 acres or less for which an approved forestry management plan was in effect on or before December 31, 1985, shall be considered "other farmland". The Department of Conservation shall inform the Department of and each chief county assessment officer of each parcel of land covered by an approved forestry management plan.

Basic Formula:

Tax Liability = 1/6 x (agricultural economic value x 33 1/3%)

4. Wasteland - which shall be assessed on its contributory value to the farmland parcel.

In no case shall the equalized assessed value of permanent pasture be below 1/3, nor the equalized assessed value of other farmland, except wasteland, be below 1/6, of the equalized assessed value per acre of cropland of the lowest productivity index certified under Section 10-115.

Special Circumstances: Vegetative filter strips

Effective January 1, 1997, through December 31, 2006, land located between a farm field and an area to be protected, including surface water, streams, rivers, or sinkholes, is considered a vegetative filter strip. The land must be at least 66 feet in width and contain vegetation that has a dense top growth, forms a uniform ground cover, has a heavy fibrous root system, and tolerates pesticides used in the farm field (Property Tax Code, Sec. 10-152 [35 ILCS 200/10-152 ]).

In counties with fewer than 3 million inhabitants, vegetative filter strips will be valued at one-sixth of their productivity index "equalized assessed value" as cropland (Property Tax Code, Sec. 10-152 [35 ILCS 200/10-152 ]). In counties with 3 million or more inhabitants, the land will be valued at the lesser of (1) 16% of the fair cash value of the farmland estimated at the price it would bring at a fair, voluntary sale for use by the buyer as a farm, or (2) 90% of the 1983 average equalized assessed value per acre certified by the Department of Revenue.

Yield Tax (Harvest Fee)

When a timber buyer purchases timber the buyer must determine the amount to be paid for such timber, or the value of items to be bartered for such timber, and must deduct from the payment to the timber grower an amount which equals 4% of the purchase price and shall forward such amount to the Department of Natural Resources, along with a report of the purchase on forms provided by the Department. (225 ILCS 735/9a)

Every timber grower who utilizes timber produced on land he owns or operates for sawing into lumber, for processing, or for resale, except a person who occasionally uses his own timber for sawing or processing for his own use and not for resale, shall report periodically, as required by regulation of the Department, the quantity of timber produced and utilized by the owner or operator during the reporting period. Such timber grower shall pay to the Department, when the periodic report is submitted, an amount equal to 4% of the gross value of the timber utilized during the period.