FARMLAND VALUATION

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Historical information of the Farmland Assessment Law.
Since the enactment of the Farmland Assessment Law in 1977, farmland in Illinois has been assessed for property tax purposes on its ability to produce a crop (agricultural use value) and NOT on its market value. 

In 1986, the farmland law was amended. This amendment had a limiting impact on the movement of farmland assessed values from one year to the next. The language in that amendment read as follows: “…increase or decrease in equalized assessed value per acre by soil productivity index shall not exceed 10% from the immediate preceding years soil productivity index certified value. 

Public Act (PA) 98-0109 statutory change.
Beginning with assessment year 2015 (taxes payable in 2016), the farm provision in PA 98-0109 amends 35 ILCS 200/10-115 part (e) of the Property Tax Code. The amended language is underlined below: “…increase or decrease in the equalized assessed value per acre by soil productivity index shall not exceed 10% from the immediate preceding years soil productivity index certified assessed value of the median cropped soil; in tax year 2015 only, that 10% limitation shall be reduced by $5 per acre.” 

What is the “soil productivity index” (PI)?
The “Soil Productivity Index” is a soil rating usually given on a per-acre basis as determined by an ID soil survey. The lower the PI, the lower the expected crop yields. As the PI increases, so do the projected crop yields. For per-acre value determination, the Department of Revenue employs a PI scale from a low of 82 to a high of 130. 

How is the “equalized assessed value” of farmland determined by FATAB?
The “equalized assessed value” is calculated by multiplying the agricultural economic value by 33.33%. 

How was the Certified Assessed Value calculated for 2014?
Before PA 98-0109 became law; the Property Tax Code limited the increase or decrease of each soil type to 10% of its previous years soil PI certified value. As a result, the Certified Assessed Value for each soil type was limited to 10% of its previous value. This was the value that was used for the tax bill calculation. 

Tax Year 2014 Examples:
Per Acre Pricing for PI 82 Soil Type:
$1,770.83 (Agricultural Economic Value)
X .3333 (Level of Assessment)
$590.28 (Equalized Assessed Value)
$13.87 (2013 Certified Value)
X 1.10 (10% limit)
$15.26 (2014 Certified Value) 

Because, in tax year 2014, the increase is limited to 10% of its previous years soil PI certified value, the taxable per-acre value for soil type 82 is $15.26. 

Per Acre Pricing for PI 130 Soil Type:
$3,650.44 (Agricultural Economic Value)
X .3333 (Level of Assessment)
$1,216.81 (Equalized Assessed Value)
$587.21 (2013 Certified Value)
X 1.10 (10% limit)
$645.93 (2014 Certified Value)
Because, in tax year 2014, the increase is limited to 10% of its previous years soil PI certified value, the taxable per-acre value for soil type 130 is $645.93.

How does PA 98-0109 change the Certified Assessed Value calculation for 2015?
PA 98-0109 amended the Property Tax Code to limit the increase or decrease in its previous years soil PI certified values to 10% of the median cropped soil less $5.00 for tax year 2015. As a result, the 2015 Certified Assessed Value for each soil type is limited to a 10% increase of the previous years median cropped soil certified value less $5.00. The median cropped PI soil level is 111. Therefore, for tax year 2015 (payable in 2016) all soil types in the PI scale from 82 to 130 will receive the same dollar-per-acre increase.

Tax Year 2015 Examples:
Per Acre Pricing for PI 111 Soil Type:
$203.32 (111 PI Certified 2014 Value)
X 0.10 - $5.00 (10% increase less $5.00)
$15.33 (Increase across all soil types)
Per Acre Pricing for PI 82 Soil Type:
$2,093.21 (Agricultural Economic Value)
X .3333 (Level of Assessment)
$697.74 (Equalized Assessed Value)
$15.26 (2014 Certified Value)
+$15.33 (Dollar increase)
$30.59 (2015 Certified Value) 

Because, in tax year 2015, the increase is limited to 10% of the previous value of the median cropped soil less $5.00, the taxable per acre value for soil type 82 is $30.59.

Per Acre Pricing for PI 130 Soil Type:
$4,320.33 (Agricultural Economic Value)
X .3333 (Level of Assessment)
$1,440.11 (Equalized Assessed Value)
$645.93 (2014 Certified Value)
+$15.33 (Dollar increase)
$661.26 (2015 Certified Value) 

Because, in tax year 2015, the increase is limited to 10% of the previous years soil PI certified value of the median cropped soil less $5.00, the taxable per-acre value for soil type 130 is $661.26.
Note: Calculations may be different because they are based upon the actual Certified Values.

How does PA 98-0109 change the Certified Assessed Value calculation for 2016?
For subsequent tax years after 2015, the $5.00 deduction will be eliminated and the increase or decrease will be limited to 10% of the previous years soil PI certified value of the median cropped soil.

What if I have crop loss due to frequent flooding?
Frequent Flooding Crop Loss Page   

How do I get more information about farmland assessment in Illinois?
Illinois Department of Revenue
Farmland Assessment Page (link to http://www.revenue.state.il.us/LocalGovernment/PropertyTax/farmland.htm )
Conservation Programs (link to http://www.revenue.state.il.us/LocalGovernment/PropertyTax/conservation.htm )

Department of Natural Resources and Environmental Sciences
Soil Productivity Index Ratings (link to http://www.revenue.state.il.us/publications/pubs/pub-122.pdf )

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