A board of review decision can also be appealed directly to a circuit court. It’s an option that taxpayers often overlook!

By James W. Chipman

Boards of review don’t have the final say about property tax assessments, however they’re a necessary stop in the appeal process. Taxpayers who are unhappy with their board decision have two options: appeal to the state Property Tax Appeal Board (PTAB) as described in my Aug. 24, Sept. 12 and Nov. 27 blogs; or, file a tax objection complaint in the circuit court. You cannot file appeals in both venues. The good news is that taxpayers who miss the 30-day filing deadline for taking an appeal to the PTAB still have time to pursue the tax objection remedy.

Filing a tax objection complaint, the lesser known of the two alternatives, involves a formalized legal process that’s full of conditions, requirements and deadlines that make it a potential minefield for inexperienced taxpayers or attorneys. While tax objection cases are more common in Cook County than elsewhere in the state, here’s what a taxpayer can expect if they choose this remedy.

Before going to court

Prior to filing a tax objection complaint, the taxpayer must pay the entire tax due on the property* on time and have filed an appeal with the board of review at the appropriate time**. Once these requirements are met and a complaint is filed, 100% of the taxes are considered paid under protest.

The court process

The process begins when a complaint is filed in the circuit court of the county where the property is located. The complaint must specify the reasons why the assessment is excessive. Any number of factual and legal arguments can be made, but in most cases, it’s about whether the fair market value of the property is accurate. The county collector or treasurer is named as a defendant but is not required to file a response to the complaint. The state’s attorney, who acts as legal counsel for the county, generally represents the collector. A tax objection case is subject to rules of practice and procedure, including discovery. This means each party can subpoena documents and witnesses.

Taxpayers face an uphill battle. When a case goes to trial, there’s a rebuttable presumption that the property assessment is correct and legal and taxpayers must overcome this presumed correctness by clear and convincing evidence.*** That’s the highest burden of proof in a civil matter. A judge sitting without a jury hears the case de novo, or anew, and will make one of the following rulings:

• Confirm the assessment.

• Grant a reduction and order a refund, in which case the taxpayer is entitled to interest.

• Or, in certain instances, increase an assessment if it’s felt the evidence tendered by the taxing body is superior to that filed by the taxpayer.

After the court’s ruling

The taxpayer or the collector can appeal an adverse ruling through the court system just like in any other civil matter.**** However, with any court appeal, there are strict time limits and procedural rules that govern the process.

Taxpayers have choices when it comes to appealing their property tax assessments. Going to court is one worth considering as it can actually result in a faster decision being made than if the case had been appealed to the PTAB.

If you want to learn whether filing a tax objection complaint may be your best alternative, please contact Jim at JWChipman@GCTSpringfield.law or 217.280.5518.

Sources:
*35 ILCS 200/23-5 (The process is different in Cook County – see 35 ILCS 200/23-5 & 23-10)
**35 ILCS 200/23-10
***35 ILCS 200/23-15(b)(2)
****35 ILCS 200/23-15(c)

By James W. Chipman

There’s a remedy for correcting errors or mistakes in a property tax assessment even after the deadline for appealing to the board of review has passed.

Mistakes happen. If a mistake occurs in the property tax process, it could be costly if not corrected. Fortunately, some errors are fixable -- even those that may have occurred in a previous year or years -- thanks to what is known as a Certificate of Error, or in property tax parlance, a C of E. When an assessment error is discovered, taxpayers can seek relief by filing a C of E with local assessing officials. However, be advised that the granting of a C of E by an assessing authority is discretionary, not mandatory.

DEFINING WHAT IS WRONG TO MAKE IT RIGHT

A Certificate of Error is a written acknowledgement by either the county supervisor of assessments (chief county assessment officer) or the board of review that something is wrong with your assessment. The C of E law can be used to correct problems such as mathematical errors, incorrect descriptions of property, duplicate assessments, and improvements that have been damaged or destroyed. It also can apply to cases where an exemption for which a property was eligible, but the exemption was not applied to the tax bill.

There are some instances that cannot be remedied by a C of E, including “errors of judgment as to the valuation of the property.”* Ordinary valuation disputes about market value or lack of uniformity can only be resolved by filing an appeal with the board or review and the state Property Tax Appeal Board (PTAB).

C OF E PROCESS AND PROCEDURE

In Illinois counties outside of Cook County, the C of E process is initiated whenever the supervisor of assessments or the board of review discovers an error, or upon the taxpayer’s initiative. A C of E requires the approval of the supervisor of assessments and a majority of the board of review. It is then forwarded to the county clerk and treasurer.

Interestingly, a taxpayer isn’t entitled to notice and an opportunity to be heard. In fact, local assessing officials can fix a mistake without the taxpayer’s knowledge or input. Should the county treasurer refund money because of a C of E, the taxpayer is entitled to 0.5% interest per month.**

LIMITATIONS AND THE NEED FOR AN ANNUAL REVIEW

Generally, a C of E can be issued “at any time before judgment or order of sale is entered” in a proceeding to collect unpaid taxes on a property.*** The term “judgment” refers to the annual tax sale that typically takes place within 60 days after the second installment of taxes is due.

While local assessing officials must act before the annual application for judgment, a 1977 Illinois Attorney General opinion added a further limitation finding that the period in which a C of E may be issued expires when a taxpayer files an appeal with the PTAB or when the PTAB renders a decision.****

Like it or not, the property tax process is prone to mistakes. That’s why an annual review of your property assessment and tax bill for accuracy is time well spent.

If you find an error or mistake on either of your documents, contact Jim at JWChipman@GCTSpringfield.law or 217.280.5518 for advice on whether a C of E is the best way to remedy your situation.

Sources:
*35 ILCS 200/14-20 (The certificate of error process differs in Cook County – see 35 ILCS 200/14-10 & 200/14-15)
**35 ILCS 200/20-178
***35 ILCS 200/14-20
****IL Atty. Gen. Op. No. S-1307 (1977)

By James W. Chipman

Wind energy devices have proliferated across the central Illinois landscape in recent years. Get wind of how the assessment process works by talking to a property tax attorney.

Illinois is home to both the Windy City and a very flat, windy prairie. When the state’s first wind turbine went online in rural Lee County in 2003, no one could have guessed that 15 years later over 2,600 of these devices would be operational and account for 6.2% of all in-state electrical production.*

Wind turbines convert the wind’s kinetic energy into electrical energy for commercial sale. Most turbines are located in rural settings where land is rented from the property owner, usually a farmer. The company that installed the turbine pays the taxes, and the farmer receives an annual royalty. One individual “wind farm” typically occupies about an acre of land.

TWISTING IN THE WIND

Because wind turbines have both real and personal property components, assessment criteria varied from county to county based on a jurisdiction’s treatment of classifying property prior to 1979. (Real and personal property classification is still unsettled law.) Inconsistent and confusing assessments were frequently the subject of appeals before boards of review and the state’s Property Tax Appeal Board.** Eventually, it became clear that the wind farm valuation process needed a legislative solution.

WINDS OF CHANGE

A 2007 change in Illinois law made the state even more attractive to wind developers when a uniform system of tax assessment was finally adopted.*** The “market value” of a turbine is $360,000 per megawatt of capacity adjusted annually for inflation by a trending factor. An amount for physical depreciation is then deducted from the “trended real property cost” to determine the assessed value [($360,000 x trending factor) – depreciation = assessed value]. Wind turbine operators must have a surveyor prepare a plat that includes a metes and bounds description of the area surrounding the turbine over which the owner exercises exclusive control.

Although wind turbine assessments are now computed annually under the state formula, assessments can be challenged if the turbine is affected by what appraisers call “functional and external obsolescence.” These two forms of depreciation differ from physical depreciation, which is deterioration of property due to age and wear. Functional obsolescence occurs when conditions exist within the property—such as an outdated design feature—that cannot be easily changed, as opposed to external or economic obsolescence, which is due to negative influences outside the property and are usually not fixable.

Don’t throw caution to the wind. If you have questions about a wind farm assessment, call a property tax attorney for answers.

Learn more about wind farm assessments by contacting Jim at JWChipman@GCTSpringfield.law or 217.280.5518.

Sources:
*“Wind Energy in Illinois” U.S. Wind Energy State Facts. American Wind Energy Association (2017)
**Property Tax Appeal Board decision (#06-2736.001-C-2: Pike Co.), Feb. 23, 2010
***35 ILCS 200/10-600 et seq.