Tax Process Overview

A property owner’s real estate tax bill is arrived at each year by two separate procedures. One is the tax levy and the other the assessment process. They work independently of each other. The levy process determines the total amount of taxes the county must collect each year to pay for government services. The assessment process determines what portion of that total tax each owner must pay.

The Tax Levy

Each year all the tax districts which render service in the property area go through a series of procedures to establish a tax levy sufficient to meet their budgeted needs. These districts include the local board of education, police and fire departments, local government administration, and all the others that are itemized on the tax bill. The percentage of the total tax which each district is entitled to collect is calculated by the County Clerk and stated on the tax bill as the tax rate for that year. When all the tax rates are totaled the aggregate Local Tax Rate is thereby determined. These tax levy procedures are for the most part insulated from taxpayer claims. Relatively minor procedural errors are subject to judicial review through a Tax Rate Objection which lead to potential refunds of a relatively small portion of the tax.

The Assessment Process

While the levy process is moving along, so are the assessment procedures. The Assessor acts without reference to what is going on in the County Clerk’s office with regard to the tax levies. The Assessor’s function is to determine, subject to review by the local Board of Review and the Illinois Property Tax Appeal Board, the market value of all non-exempt parcels of real estate in each county for tax assessment purposes. This process is subject to appeal as it moves along to final determination, as well as after the tax bill issues before the Property Tax Appeal Board or Circuit Court (Specific Objection). In Cook County, the Assessor conducts a triennial re-valuation of all the properties in the county (Triennial Assessment Period). A pre-determined one-third of the county is thereby reassessed each year (See Cook County Township Map). Other counties adopt different reassessment cycles. The Assessors rely on comparable sale data as a guide. This data is made available to the Assessors, as they receive all sales data in their respective counties when deeds are recorded. Once the market value is determined, a certain percentage, called the Assessment Factor, is applied to finally determine the total assessed valuation of the property.

Upon the completion of the county’s assessment process, the Illinois Department of Revenue (DOR) performs its own independent annual analysis of the assessments and market value data. When it determines that the ratio of assessment to market value is not in line with statutory assessment ratios, it applies a county-wide multiplier (the state Assessment Factor) to the county’s assessment. That process is generally protected from taxpayer claims. In Cook County, the DOR’s equalization factor has been hovering near a multiplier of 3, resulting in a tripling of the county’s assessed valuations. (See Chicago Tax Rates & Cook County Equalization Factors). Once so applied, the assessed valuation becomes what is called the equalized valuation. In the counties other than Cook the DOR has historically found no need for any substantial adjustment.

The Tax Bill

When all these procedures are completed, the total tax levied by the county is spread over all the properties in the county. Each property owner’s share of that tax is determined by how much of the total equalized valuation is placed on that property compared to the total equalized valuation for all the property in the county.

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