Publication 136 Property Assessment and Equalization Pub 136

Illinois Department of Revenue

Publication 136 April 2016

Property Assessment and Equalization

The information in this publication

is current as of the date of the

publication. Please visit our web site at

tax.illinois.gov to verify you have the

most current revision.

This publication is written in the plain

English style so the tax information is

easier to understand. As a result, we

do not directly quote Illinois statutes

and the Illinois Administrative Code.

The contents of this publication are

informational only and do not take

the place of statutes, rules, and

court decisions. For many topics,

we have provided a reference to

the applicable section or part of the

Illinois Administrative Code for further

clariﬁcation or more detail. All of the

sections and parts referenced can be

found in Title 86 of the Code.

About this publication

Property tax is the largest single tax in the state of Illinois. It is also a major source

of revenue for local government taxing districts. Every person and business in Il-

linois is affected by property taxes, whether by paying the tax or receiving services

or beneﬁts paid for by property taxes.

When Illinois became a state in 1818, the constitution contained a provision for

taxing property in direct proportion to the value of the property. From 1818 to

1930, amendments to the constitution provided the state with various powers

concerning property taxation. The last year the state levied real estate taxes was

1932. Since then, property taxes have been levied at the local level.

Property tax is governed by the Property Tax Code, 35 ILCS 200/1-1 through

32-20. It is a local tax imposed by local government taxing districts (e.g., schools,

municipalities, counties). Revenues from property tax are collected and spent at

the local level. Property taxation produces more than three-fourths of the total tax

revenue and ﬁnances a major part of the services provided by local governmental

units which beneﬁt citizens and their property. The largest share of property tax

goes to school districts.

There are 102 counties in Illinois. Most counties, referred to as township counties,

have a township level of government. There are 17 counties, called commission

counties, which do not have the township form of government. The supervisor of

assessments has the primary assessment responsibility in commission counties.

Property can be divided into two classes – real and personal. Real property is

land and anything permanently attached to the land (e.g. buildings and ﬁxtures

permanently or constructively attached to a building). Personal property is all

property that is not real property (e.g., automobiles, livestock, money). In Illinois,

taxpayers pay property taxes only on their real property.

This publication is designed to explain, in general terms, the sales ratio and equal-

ization procedures authorized by statute and the people and agencies responsible.

It is not a deﬁnitive interpretation of property tax law. Local assessment ofﬁcials

are the resource for speciﬁc factual information about property taxes. The appli-

cable Illinois laws can be reviewed in the Illinois Property Tax Code.

Note: See “Illinois Property Tax System” publication on our Web site for general

information about Illinois property assessment and billing procedures.

Get forms and other information at tax.illinois.gov

Printed by authority of the state of Illinois - Web only-1.

Property Assessment and Equalization

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Contents

Acronyms .........................................................................................................................................3

Glossary of Terms ............................................................................................................................4

General Information

What is property tax? .......................................................................................................................... 6

What is “market value”? ....................................................................................................................... 6

How is fair cash value determined? ...................................................................................................... 6

Sales Ratio Studies

What is the purpose of a sales ratio study? ......................................................................................... 7

What is the sales ratio process? .......................................................................................................... 7

Which transfers (sales) transfers are not included in a sales ratio study? ............................................ 8

Are any other sales excluded from the sales ratio study? .................................................................... 8

Do outliers affect the statistics obtained from the sales ratio study? .................................................... 8

Statistics and what they represent ........................................................................................................ 9

Table 1 — Assessment ratios .......................................................................................................... 9

Table 2 — Urban weighted median ratios ..................................................................................... 11

Table 3 — Final Equalization factors ............................................................................................. 12

Formulas for sales ratio studies and equalization ............................................................................... 12

Examples of statistical calculations .................................................................................................... 13

How are sales ratio studies used? ...................................................................................................... 14

Assessment levels

What is an assessment level? ........................................................................................................... 15

How is level of assessment computed? .............................................................................................. 15

Do assessment levels vary? .............................................................................................................. 15

Why must assessment levels be uniform? .......................................................................................... 15

Who must ensure uniform assessments? .......................................................................................... 15

Equalization

What is equalization? ............................................................................................................. ............ 16

Do all counties use intra-county equalization?........................................................................ ............ 16

Why do local assessors and boards of review issue multipliers?............................................ ............ 16

Does the state force local assessment ofﬁcials to do local equalization?................................ ........... 16

Must IDOR equalize assessments?...................................................... .............................................. 17

Why is IDOR required to issue a state multiplier?................................. .............................................. 17

How does the state calculate the county-wide multiplier?................................................................... 17

How is the state multiplier computed?..................................................................................... ........... 17

Which years of sales are used when the multiplier is calculated?............................................ .......... 17

Why are three years’ worth of sales ratios used?..................................................................... .......... 17

How does the states multiplier affect assessments?................................................................ .......... 17

Applicable statutes ........................................................................................................................ 19

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Property Assessment and Equalization

Acronyms

Board of Review BOR

Chief County Assessment Ofﬁcer CCAO

Coefﬁcient of concentration COC

Coefﬁcient of dispersion COD

Equalized assessed value EAV

Illinois Department of Revenue IDOR

Price-related differential PRD

Real Estate Transfer Declaration RETD

State Property Tax Appeal Board PTAB

Property Assessment and Equalization

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1/3

percent

and the local rate is 6 percent; Effective

Tax Rate = 2 percent; if market value $90,000, tax =

$1,800).

Equalization - Application of a uniform percent in-

crease or decrease to assessed values of various ar-

eas or classes of property to bring assessment levels,

on the average, to a uniform level of market value.

Equalization factor (multiplier) - Factor applied to

assessed valuation of each county that raises or low-

ers the level of assessments to the mandated level of

1/3

percent of market value (intra-county factors may

be used by a county to bring all property to a uniform

level. Factors are sometimes referred to as multipliers.

Not applied to farm land, buildings and coal rights.

Equalized assessed value (EAV) - Assessed val-

ue multiplied by any applicable equalization factor;

can form tax base from which tax rate is calculated;

for farm acreage, farm buildings, and coal rights the

ﬁnal assessed value is the equalized value.

Exemption - Removal of property from the tax

base; may be a partial (a homestead) or complete

(church building used exclusively for religious use).

Extension - Process in which the county clerk

determines the tax rate needed to raise the revenue

(levy) certiﬁed by each taxing district. The actual

dollar amount billed to property taxpayers in district.

General assessment year - Assessment year that oc-

curs every 4 years in which all property assessments

are reviewed, formerly known as quadrennial year.

Level of assessments - Ratio of assessed value

to the sale price.

Levy - Money a taxing body certiﬁes to be raised

from the property tax to meet its operating expenses.

Market value (full value) - Most probable sale price

of a property in terms of money in a competitive and

open market, assuming that the buyer and seller

are acting prudently and knowledgeably, allowing

Glossary of terms

Ad valorem - According to value.

Appraisal - Opinion of value supported by evidence.

Arm’s length sale - Sale between two parties, neither

is related to or under abnormal pressure from the other.

Assessed value - Value placed upon property after

multiplying its market value by the level of assessment.

Assessment - Ofﬁcial act of discovering, listing,

appraising, and entering a value for property on the

assessment rolls for ad valorem tax.

Assessment level - Percentage of full value at

which property is being assessed. This may refer

to the statutory level (33

1/3

percent) or the actual

level as inferred from a sales ratio study.

Board of Review (BOR) - Appeal agency in each

county, consists of 3 members; commission counties

- county commissioners; in other counties members

are appointed by the county board, or are elected.

Classiﬁcation - Practice of classifying various

types of property according to use, and assigning

different assessment levels to each class. Purpose

is to tax various kinds of property at different effec-

tive tax rates though the nominal rate is the same.

Coefﬁcient of concentration (COC) - Percentage

of observations falling within 10 percent of the me-

dian level of assessments. A high COC indicates

more uniformity.

Coefﬁcient of dispersion (COD) - Statistical measure

of variation of individual assessment ratios around the

median level of assessments: Average error expressed

as a percent (%); Indicator of assessment uniformity

found by dividing the average deviation by the median.

Effective tax rate - Ratio of taxes billed to market value.

Generally found by multiplying the level of assessment

by the local current tax rate. Expressed as a percentage,

applied to the full market value (if level of assessments

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Property Assessment and Equalization

sufﬁcient time for the sale, and assuming that the

transaction is not affected by undue pressures.

Mean - An arithmetic average.

Median - Middle value of a group of numbers after

they have been ranked.

Mode - Number that occurs most frequently in a

set of numbers.

Outlier - Observations that have unusual values,

that is, differ markedly from the median.

Overlapping taxing districts - Taxing districts that

are located in more than one county.

Price-related differential (PRD) - Measures a pattern of

inequity in assessments related to the value of property.

Quartiles - Values that divide a set of data into four

equal parts (25%, 50%, 75%, 100%) when the data

are arrayed in ascending order.

Sales ratio study - Analysis of the percentage re-

lationship of assessed value (AV) to market value;

ratio equals prior year assessed value (AV) divided

by the current year sales price (SP) (Minimum of

25 useable sales/appraisals required).

State Property Tax Appeal Board (PTAB) - Highest

state quasi-judicial body which hears appeals from

taxpayers and taxing bodies on property tax assess-

ment decisions by the county Board of Review.

Tax base - Composed of the equalized assessed

value (EAV) of all locally assessed property, less

all qualiﬁed exemptions, plus the value of any state

assessed property.

Tax rate - Amount of tax due stated as a percentage

of the tax base, derived by dividing the levy by the

EAV. Some districts have a maximum statutory rate;

the sum of the fund rates equals the total district rate.

Tax year - Refers to the year of assessment.

Taxing body - Governmental organization that lev-

ies a property tax.

Taxing district - Territorial area under the taxing

body's jurisdiction.

1/3

% - Means 33

1/3

percent of the actual value

of real property as determined by IDOR’s assess-

ment/sales ratio studies for the 3 most recent years

preceding the assessment year, adjusted to take

into account the implementation of any changes in

assessment levels since the data for such studies

were calculated.

Urban weighted method - Non-farm values; used

in determining a county's median level of assess-

ment by dividing the county's total assessed value

(AV) by the county's total estimate of full value

(EFV); this is the preferred method of calculating a

county multiplier.

Useable sales/appraisals - Those sales that re-

ﬂect the deﬁnition of “market value”

Glossary of terms

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What is property tax?

Property Tax is a tax based on the value of a prop-

erty. For this reason it is often called an ad va-

lorem tax. (i.e., according to value). Property tax

is a local tax imposed by local government taxing

districts (e.g., school districts, municipalities, coun-

ties) and administered by local ofﬁcials (e.g., town-

ship assessors, Chief County Assessment Ofﬁcers

(CCAOs), local Boards of Review (BORs), county

collectors). Property taxes are also collected and

spent at the local level. The state of Illinois does not

have a state property tax.

What is “market value”?

“Market value” is the most probable sale price

(in terms of money) in a competitive, open market.

This is under the assumption both buyer and seller

are acting prudently and knowledgeably, and allow-

ing sufﬁcient time for the transaction which is not

affected by undue pressures.

In Illinois, most real property must be assessed

based on its market value. The Illinois Property Tax

Code uses the term “fair cash value” to describe

market value.

How is fair cash value determined?

Fair cash value is determined by using one or

more of the following methods:

Market data: Comparison of similar, neighbor -

ing properties recently sold to the property being

assessed.

Cost: Calculation of the cost to reproduce (or

rebuild) a property, subtracted by the deprecia-

tion (e.g.,

wear and tear, age) amount, plus the

land value.

Income: The present worth of the income

from an income-producing property is calculated

by measuring the amount, quality, and duribility

of the future net income the property can be

expected to return to an investor.

Illinois law requires farmland to be reassessed

each year and all other property must be viewed,

inspected, and revalued every four years. The

only exception is for Cook County, which has a

three-year reassessment cycle. The general as-

sessment date is January 1. This is also the date

the assessment cycle begins for all real property

which must be valued as to its condition at that

time. Local assessment ofﬁcials may revalue prop-

erty at any time if its value is incorrect.

Once market value has been determined, asses-

sors put a value on the property for the tax as-

sessment books. This value should be

1/3

percent of the fair cash value. For example,

if the fair cash value of a property is $150,000,

and the county level of assessments is at the

statutory level of 33

1/3

percent, the assessed value

of the property to be entered in the assessment

books would be $50,000.

General Information

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Property Assessment and Equalization

What is the purpose of a sales ratio study?

The sales ratio study shows whether assessments

within a given area actually average 33

1/3

percent of

the market value. If the study results in something

other than 33

1/3

percent, a blanket percentage change

(increase or decrease), called an “equalization factor”

or “multiplier”, is applied to all non-farm property to

bring the level of assessments to 33

1/3

percent.

In addition to its value in determining inter-county

equalization factors, an assessment/sales ratio

study is a useful tool for local assessing ofﬁcials

in their efforts to achieve assessment uniformity;

Comparison of median assessment levels for

townships or property categories within a county

can reveal a lack of uniformity among categories

or geographic areas within the county. This lack of

uniformity can often be remedied by intra-county

equalization, which may raise the average assess-

ment level in some townships, areas, or categories

and lower it in others, until all are at the average

assessment level of the county.

In addition to supplying information about aver-

age assessment levels, the study can also provide

knowledge of the degree of uniformity, or degree of

divergence from the average, in the assessments

of individual parcels within a district. The closeness

of individual assessments to the average assess-

ment level is just as important to a property owner

as the level itself.

What is the sales ratio study process?

Step 1: County recorded RETDs are sent to IDOR.

When property is sold in Illinois, a real estate trans-

fer declaration (RETD) is completed. The RETD

identiﬁes the property sold, amount paid, and other

information used to determine if a sale is a useable

Sales Ratio Studies

A sales ratio study compares a property’s assessed value as of January 1 in one year to its selling price

in the following year. For example, the assessed value of property as of January 1, 2015, is compared to

its selling price in 2016. The sales ratio is the prior year’s assessed value (e.g., 2015) divided by the cur-

rent year’s selling price (e.g., 2016).

(arm’s-length) transaction. An arm’s length transac-

tion is a sale between two parties, neither of whom

is related to or under abnormal pressure from the

other.

The assessed value as of January 1

from the

year prior to the sale is also included.

Note: Transfers of farmland are excluded because

farmland assessments are not based on market

value; instead, farmland is assessed based on its

use value (ability to generate income from farming

based on the soil’s ability to produce a crop).

Step 2: IDOR reviews each real estate transfer

declaration

Identiﬁes bona ﬁde useable (arm’s-length) sales

occurring between willing sellers and buyers. Once

identiﬁed, IDOR calculates the sales ratio for each

useable transfer.

Step 3: Statistical measures are calculated

Statistical measures, (median ratio, ﬁrst and third

quartiles, coefﬁcient of dispersion (COD), etc.)

are computed for urban or non-farm property in

each geographic area with 25 or more useable

(arm’s-length) sales. For Cook County, statistical

measures are computed for any class of property

with 25 or more useable sales. For all other coun-

ties, IDOR calculates median assessment levels for

both “improved” and “unimproved” urban property

when there are 25 or more useable transfers in

each category. Statistical information helps as-

sessing ofﬁcials identify systematic bias toward

assessment levels on unimproved property.

Step 4: Median levels of assessment are adjusted

Median levels of assessment from the sales ratio

study are adjusted to reﬂect any signiﬁcant as-

sessment changes during the year of the study. By

analyzing the county’s assessment data,

Property Assessment and Equalization

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Are any other sales excluded from the

sales ratio study?

Yes. Outlier ratios are observations that have

unusual values, that is, values that differ mark-

edly from the median. For example, a property

assessed at $30,000 and selling for $5,000 would

very likely be an outlier ratio since the ratio of

600% (30,000 ÷ 5,000 x 100%) is so extreme.

There are various explanations for outlier ratios:

• Unusual market changes — Inﬂation or

deﬂation in the regional economy, variation

in the interest rates, population movements

due to shifts in the labor market often cause

rapidly rising or decreasing real estate prices.

Under such conditions accurate property

assessments become very difﬁcult and may

differ signiﬁcantly from market price.

• Non-market transactions — The most

common is transactions involving related

parties where the property sells for below

its market price. Forced sales are also non-

market transactions.

• Data errors — These are usually clerical

errors, such as mismatching the assessment

and the sale price.

•

Erroneous assessment or sale price information —

Incorrect sale price and/or assessment entries

on the real estate transfer declarations.

• Assessment errors — Limited or total lack

of access to a property, inaccuracies in

measurements, or incomplete assessments.

Do outliers affect the statistics obtained

from the sales ratio study?

Some of the measures of uniformity are sensitive to

the presence of outlier ratios; others are not. The

COD, one of the most widely used measures of

uniformity, may vary greatly when outlier ratios are

present. By deﬁnition, the COD is a statistical mea-

sure of variation of individual assessment ratios

around the median level of assessments (an aver-

age error expressed as a percentage). Eliminating

these outlier ratios may lower the COD. The affect

on the PRD is very minimal.

township medians can be adjusted to reﬂect the

extent of any reassessment during that period.

Revised township levels are used to obtain an ad-

justed urban-weighted county average, forming the

basis of IDOR’s inter-county equalization process.

Step 5: Adjust prior years’ assessment levels

Step 4 is for a single-year sales ratio study. If sig-

niﬁcant adjustments are made during the year

of the study, medians for the two prior years are

also adjusted. Finally, the average of the last three

years’ medians is calculated. The result is the basis

on which the tentative and ﬁnal multipliers will be

certiﬁed.

See Exhibit A on Page 18 to determine which years

are included when adjusting prior year assessment

levels for equalization purposes.

Which transfers (sales) are not included

in a sales ratio study?

Some examples of transfers (sales) not included in

the sales ratio study are

• Land and improvements classiﬁed as “farm”

• Between relatives

• Conveying less than full title

• To governmental units

• To/from a charitable organization

• To/from a lending institution

• Auction sales

• Transfers in which the assessed value and

sales price are not comparable (e.g., property

formerly assessed as a “model home”, parcel

was split/divided, building destroyed or torn down)

• Deeds of convenience or to correct errors

• Deeds recording sales made in previous years

• Certain speciﬁc deed types

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Property Assessment and Equalization

Statistics and what they represent

The COD is the most commonly used statistical measure of uniformity of assessments. The higher the

COD, the greater the scattering of individual assessments around the county median level and the great-

er the degree of inequity in the sharing of the tax burden among property owners in a county.

To illustrate the practical effect of dispersion and inequity in assessments on a property with a $40,000

market value, consider the following example:

Assume a county has a median level of 35.00 percent and a COD of 30.00 percent. A COD of this

degree means the assessment levels of individual properties can be expected, on average, to deviate

from the median level by 30.00 percent.

Thirty percent of the median is 10.50; therefore, 30.00 percent less than the median is 24.50 percent

and 30.00 percent more is 45.50 percent. The assessed value of the property at 35.00 percent would

be $14,000 ($40,000 x .35 = $14,000); at 24.50 percent it would be $9,800; and at 45.50 percent it

could be $18,200. Assuming a tax rate of $6.80 per $100 of assessed value, a taxpayer

owning property with a market value of $40,000 would pay a property tax bill of $952 on an assessment

of 35.00 percent ($14,000 x 6.80 ÷ 100 = $952); $666 on an assessment of 24.50 percent; and $1,238

on an assessment of 45.50 percent.

Below is a listing of the statistical tables the state maintains, followed by a detailed explanation of their contents.

• Table 1, Assessment Ratios

• Table 2, Urban Weighted Median Ratios

• Table 3, Final Equalization Factors

Table 1, Assessment Ratios

Example of Table 1:

Description of Table 1 contents

• Column 1— Geographic Area (County, township, and multi-township)

This column lists the geographic area to which the ratios apply. Separate township studies are reported

if there were 25 or more usable sales in that township. All townships with less than 25 useable sales

are grouped together and reported in the All Others category.

• Column 2— Category

The category shown is “urban,” with the exception of Cook County. For Cook County, the major classes,

as deﬁned by the county ordinance, are shown. The Total county median shown in this table is an

un-weighted median. When sufﬁcient usable sales were available, the urban sales were further

separated into “unimproved” and “improved” subcategories. In order for the subcategories to be

presented, there must have been more than 25 useable sales contained in both “unimproved” and

“improved”. For this purpose, “unimproved” property is deﬁned as a property without a building.

Assessment Ratios

Coefﬁcient of Number Price-related 86% Coefﬁcient of

Geographic

Adjusted Dispersion of Quartiles Ratio Differential Conﬁdence Concentration

Area Median Median (COD) Sales 1st 2nd Range (PRD) Interval (COC)

County Name

Total County Urban

- 28.42 18.68 727 26.10 31.77 68.58 1.01 27.89 - 28.92 43.19

Townships

Township 1 Urban

31.72 30.34 14.53 42 25.45 33.91 25.40 1.01 26.70 - 31.73 40.48

Township 2 Urban

29.87 28.57 16.50 532 25.44 31.53 64.19 1.00 27.93 - 29.00 46.80

All others Urban

28.68 27.50 25.71 153 23.26 32.68 66.72 1.03 26.36 - 29.14 33.99

Property Assessment and Equalization

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• Column 3— Adjusted median

The ratio study was conducted using the current year selling price and the prior year assessed value.

For example, in the 2015 tables, the 2014 assessments were compared to the 2015 selling price. The

ratios are then adjusted according to the percentage changes in assessments made in 2015 by any

township or multi-township assessor, CCAO, or BOR. If there was a reassessment in 2015, the

adjusted median becomes the level of assessment for that township in 2015. If there were no signiﬁcant

assessment changes in 2015, the median in Column 4 is the 2015 level of assessment.

• Column 4— Median

The median is the best measure of the average assessment level for a category and a geographic

area since it is not unduly sensitive to extreme ratios (as can be the case with mathematical average

or mean). The median is the exact midpoint of all individual assessment ratios for a given property and

area category. The median is found by ranking the individual assessment ratios in ascending or

descending order and counting downward until the middle value is reached. If an even number of ratios

is found, the two middle ratios are averaged to calculate the median.

• Column 5— Coefﬁcient of dispersion (COD)

This statistic provides a measure of the variation of individual assessment ratios around the median.

The median indicates the average assessment level but does not provide information about how closely

the individual ratios are grouped around it. If the individual ratios are clustered closely around the

median, the COD will be low, which implies the assessments are relatively uniform. How ever, if the

individual ratios vary widely from the median, the COD will be high, which indicates that the property

was not uniformly assessed and the property tax burden was not fairly distributed among taxpayers in

that particular area.

Statistically, the COD expresses the average absolute deviation of the individual ratios from the median

ratio as a percentage of that median.

The average absolute deviation from the median is the sum of the differences between each individual

ratio and the median ratio (disregarding whether the difference is positive or negative) divided by the

total number of ratios.

• Column 6 — Number of sales

The number shown is the number of “usable” or “arms length” transactions that were included in the

study. This ﬁgure represents the total number of property transfers used in the analysis.

• Columns 7 and 8 — Quartiles

Just as the median is the ratio that divides the ranking of all individual assessment ratios into two equal

parts, quartiles are ratios that divide the ranking into four equal parts. These measures deﬁne the

distribution in greater detail and indicate any skewness.

• Column 9— Ratio range

The range is the difference between the highest and lowest ratios in a given geographic area or

category. This measure indicates the absolute variation in the distribution.

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Property Assessment and Equalization

• Column 10— Price-related differential (PRD)

In addition to the COD, the intra-area price-related differential can be used as an indicator of

assessment uniformity. While the COD measures the general scattering of individual ratios around the

median ratio, the intra-area price-related differential measures a pattern of inequity in assessments

that has a correlation with the value of the property.

If there is a tendency for the higher-valued properties to exhibit lower assessment ratios than lower-

valued properties, the price-related differential will be greater than 1.03. If, on the other hand, higher-

valued properties have higher assessment ratios than lower-valued properties, the price-related

differential will be less than .98. Differentials greater than 1.03 or less than .98 are both indicative of

an inequity in assessment.

The mean assessment ratio is the sum of all ratios divided by the number of ratios. The sales-based

average ratio is computed by adding all assessed values and sale prices and then dividing the ﬁrst

sum by the second. The intra-area price-related differential, like the COD, is an indicator of a speciﬁc

type of inequity. It cannot be used to calculate factors that will correct an inequity, nor will it indicate

if a particular parcel of property has been assessed fairly. However, it will help locate the source of the

inequity so a program can be formulated to correct the inequity.

• Column 11 — 95% conﬁdence level

The range in which one can predict with 95 percent conﬁdence the true median assessment level. As

the interval widens, the measure of central tendency is less reliable.

• Column 12 — Coefﬁcient of concentration (COC)

The coefﬁcient of concentration (COC) is a measure of uniformity that measures the percentage of

ratios that fall within a given percentage of the median. The percentage from the median used in

IDOR’s calculations is 10. If 50 percent of the ratios fall within 10 percent (plus or minus) of the median,

the COC is 50. A higher COC is an indicator of better assessment equity.

Table 2, Urban Weighted Median Ratios

Urban-weighted assessment levels are calculated using township aggregate assessment totals in con-

junction with the median levels. This process ensures that each township’s median level of assessment

has an impact on the countywide ﬁgure in proportion to the relative market value of its property.

The urban-weighted assessment level is used in the computation of the state equalization factor. Before

that factor is calculated, an adjustment is made to the ratio to account for any signiﬁcant changes in as-

sessments made by local assessing ofﬁcials since the data was collected.

The steps in the weighting procedure are shown below. The aggregate assessed values for each catego-

ry or area are obtained from the abstract of assessments, submitted by the county clerk after ﬁnal action

by the board of review, but prior to state equalization. To prevent bias, any parcels (non-farm only) having

assessments greater than $999,999 are not included in the weighting process. The remaining assessed

values are divided by the corresponding median ratio to obtain an estimated full market value of real es-

tate for each category or area. The assessed values are added to a county urban total and then divided

by the sum of the estimated full values. The result is an urban-weighted median that represents the best

estimate of the average assessment level for urban property in the county.

Property Assessment and Equalization

PUB-136 (R-04/16); (reformatted 05/19)

Page 12 of 23

Table 3, Final Equalization Factors

Example of Table 3:

County 2012 2013 2014 3-year

Average

2015 Final

Equalization

Factor

Equalized

Assessment

Level

County A 34.47 33.67 31.90 33.35 1.0000 33.33

County B 32.03 31.26 32.15 31.81 1.0478 33.33

County C 32.58 37.49 33.16 34.41 0.9686 33.33

IDOR is required to provide an equalization factor for each county that will equalize the level of assess-

ment at the statutory level of 33

1/3

percent of the fair cash value. The level of assessment to be equalized

is the mean, or average, of the urban-weighted medians of the three years immediately preceding the as-

sessment year, after adjustment for assessment changes through the current assessment year.

The urban-weighted levels of assessment for the three years involved in the calculation of the equaliza-

tion factor are shown in Columns 2 through 4. These levels have been adjusted for assessment changes,

including those made by any board of review for the current assessment year. Column 5 indicates the

mean of the urban-weighted medians for the three years. Column 6 shows the ﬁnal equalization factor

and Column 7 shows the equalized level of assessment.

Formulas for Sales Ratio Studies and Equalization

Sales Ratio = Prior year assessed value ÷ current year sale price X 100%

Coefﬁcient of Dispersion (COD) = Average deviation ÷ median X 100%

Coefﬁcient of Concentration (COC) =

No. of sales ratios within 10% of the median ÷ total no. of sales ratios X 100%

Price-Related Differential (PRD)

Sales-Based Average Ratio = Sum of assessed values ÷ sum of sales price X 100%

Mean Assessment Ratio = Sum of the sales ratios ÷ number of ratios

Price-Related Differential = Mean assessment ratio ÷ sales-based average ratio

Equalization Factor = Desired level (33.33%) ÷ prior 3-year average median level

Table 3, 2015 Final Equalization Factors

Steps in the weighting procedure

(Amounts reported in thousands)

Area Assessed value Median ratio Estimated full value

Urban township 1 $ 1,648 25.00% $ 6,592

Urban township 2 10,450 31.62% 33,049

All other urban townships 3,105 28.75% 10,800

Urban total $15,203 $50,441

Urban weighted ratio: $15,203 ÷ $50,441 x 100% = 30.14%

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Page 13 of 23

Property Assessment and Equalization

Examples of Statistical Calculations

Distribution of sales ratios

Absolute

deviation from

Assessment Sale price Sales ratio the median

$ 9,000 ÷ $ 45,000 = 20% 15

6,000 30,000 20% 15

9,000 30,000 30% 5

7,500 25,000 30% 5

7,000 20,000 35% 0

6,000 15,000 40% 5

4,500 10,000 45% 10

7,500 15,000 50% 15

5,000 10,000 50% 35

Total $68,500 $220,000 355% 85

Calculations

(derived from above data)

Number of transfers: 10

Median: 35 + 35 = 35%

First Quartile: 30% Third Quartile: 45%

Lowest ratio: 20% Highest ratio: 50%

Range: (50% - 20%) = 30%

Coefﬁcient of Dispersion (COD)

Sum of absolute deviations from the median: 85

Average absolute deviation: 85 ÷ 10 = 8.5

COD: Average absolute deviation = 8.5 ÷ 35% = 24.3%

Median

Price-related Differential (PRD)

Mean assessment ratio: Sum of ratios = 355% = 35.5%

Number of ratios 10

Sales-based average ratio: Sum of Assessments = 68,500 x 100% = 31.1%

Sum of sales prices 220,000

Price-related differential: Mean assessment ratio = 35.5% = 1.14

Sales-based average ratio 31.1%

Coefﬁcient of Concentration (COC)

(derived from distribution of sales ration data)

Median: 35

Department’s concentration percentage: 10%

35 x .90 = 31.50

35 x 1.10 = 38.50

Only 2 of the 10 ratios are in the range of 31.50 to 38.50; therefore, the COC is 20 percent.

Property Assessment and Equalization

PUB-136 (R-04/16); (reformatted 05/19)

Page 14 of 23

How are sales ratio studies used?

Sales ratio studies are used for a number of purposes.

Computation of multipliers —

Determing both county and township multipliers

used in equalizing the level of assessments

among counties (inter-county) and within the

county (intra-county). Examples of intra-county

multipliers include township, neighborhood, and

class (residential, commercial, industrial, etc.)

multipliers.

Review and appeal of assessments —

Provides a measure of the average assessment

level for a given geographic area or category of

property against which assessments of individual

parcels may be judged in determining the degree

of over or under statement, if any.

Diagnostic tool to evaluate local assessment

practices —

Local assessing ofﬁcials are required to use the

sales ratio study to evaluate their assessment

policies and make assessment changes to sales

and non-sales so the ﬁnal assessments are at the

uniform percentage of value.

Determine the assessor bonus —

To qualify for the assessor bonus award, the

average median levels of assessments of the

prior 3 years must be between 31

1/3

percent and

1/3

percent and the COD must be below the

appropriate COD as determined by the county’s

population.

Reimbursement to a county of a portion of S/A

salary —

To qualify for the reimbursement to the county, the

average median levels of assessments of the

prior 3 years must be between 31

1/3

percent and

1/3

percent.

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Page 15 of 23

Property Assessment and Equalization

What is an “assessment level”?

The percentage of fair cash value a property is as-

sessed is the “assessment level”. Illinois law requires

the assessed value of non-farm property equal 33

1/3

percent of its fair cash value except for in Cook County.

How is level of assessment computed?

The level of assessments is computed by using the

following steps to calculate a “sales ratio study” for

each county in the state. You must know the total

assessed values and total fair cash values of prop-

erty in the county. Total assessed values for each

township are reported to IDOR on the counties’

tentative and ﬁnal abstracts. Estimating the total

market value (Estimate of Full Value) is necessary

and computed by dividing the total assessed value

for the township by the median level of assess-

ments (as a decimal number). If a township had at

least 25 usable sales, IDOR will calculate a median

level of assessment. If not, the remaining sales are

placed in an “All Others” category from which a me-

dian is calculated. Once both median levels have

been determined, a county median is calculated to

determine the county’s state equalization factor.

Urban (non-farm) weighted assessment levels are

calculated by the township’s aggregate assessment

totals in conjunction with the township’s median

levels. This ensures each township's median level

of assessment has an impact on the county's me-

dian level of assessment in proportion to the rela-

tive market value of its property.

Urban weighted assessment levels are used in

the state equalization factor after any adjustments to

ratio(s), after considering any signiﬁcant changes in

assessments by local assessing ofﬁcials since the

data had been compiled. To avoid bias, parcels (non-

farm only) with assessments greater than $999,999

are deducted before the weighting process. The

remaining assessment values are divided by the cor-

responding median ratio to obtain an estimated fair

cash value of property for each category or area. The

assessed values are added to provide a county urban

total assessed value. The sum of all estimated fair

cash values provide a county urban total estimated

full value. The total assessed value is divided by the

total estimated fair cash value for the county's median

level of assessment for the year. This urban weighted

median represents the best estimate of the average

assessment level for non-farm property in the county.

Assessment Levels

Do assessment levels vary?

Yes. Assessment levels may vary from the statutory

1/3

percent within or between assessment jurisdic-

tions within a county, and between counties. These

occur for many reasons including the large number

of local assessing ofﬁcials with different value opin-

ions, and the inherent difﬁculties of the assessment

process (e.g., pressure to keep assessments low,

lack of time and resources, ministerial errors, outdat-

ed valuations, changes in economic conditions).

Why must assessment levels be uniform?

Assessment levels must be uniform to ensure

• equal distribution of the tax burden among

taxpayers;

• that tax rate and bonded indebtedness

limitations are applied equally to local

government taxing bodies; and,

• fair distribution of state grants-in-aid for

education, highways, and public assistance.

Assessed valuation is a component in the

formulas used to calculate these distributions.

The following examples help clarify why uniform

assessment levels provide equal distribution of the

tax burden among taxpayers.

Example 1:

Assessment level not uniform within

assessment jurisdiction.

Two homes with identical

market values of $150,000.

In valuing each property, the assessor estimates:

House #1’s value = $144,000

House #2’s value = $162,000

Level of assessments of 33

1/3

percent applied to

each valuation:

#1 assessed at $48,000 (32% of fair cash value)

#2 assessed at $54,000 (36% of fair cash value)

The owner of House #2 will have a higher tax bill

although the true value is identical to House #1.

Example 2: Assessment level not uniform within

the county.

Two townships (A and B) within the same

county and school district.

A assessed at average level of 20% of full value

B assessed at average level of 40% of full value

Taxpayers in the township assessed at the higher level

would, on average, pay twice as much in school taxes

as taxpayers of similar properties in the other township.

Who must ensure uniform assessments?

Both local assessment ofﬁcials (township assessors,

CCAOs, and county BOR) and IDOR are respon-

sible for ensuring property assessments are uniform.

Property Assessment and Equalization

PUB-136 (R-04/16); (reformatted 05/19)

Page 16 of 23

Equalization

What is equalization?

Equalization is the application of a uniform percentage

increase or decrease to assessed values of various ar-

eas or classes of property to bring assessment levels,

on average, to a uniform level of the market value (33

1/3

percent). Both local assessment ofﬁcials and IDOR are

responsible for equalizing assessment levels.

Two types of equalization:

Intra-county: Multipliers issued within the county to

equalize the level of assessments within that county.

“Intra-county equalization” is the work done by

local assessment ofﬁcials.

Inter-county: State-issued county multiplier used

to carry out the statutory responsibility of

equalizing

the level of assessments among counties.

“Inter-county equalization” is the work done by IDOR.

Equalization factors will not correct assessment ineq-

uities between properties within an area or class. If the

average three-year level of assessment for a county is

• less than 33

1/3

percent, IDOR will certify an

equalization factor (multiplier) greater than 1.0000.

•

greater than 33

1/3

percent, IDOR will certify an

equalization factor (multiplier) less than 1.0000

This is to bring the counties assessments levels,

on average, to a uniform level of market value.

Inter-county equalization of assessments is necessary to

• maintain the statutory assessment level through-

out the state,

• provide a uniform basis for the distribution of state

aid to schools and other state grant-in-aid programs,

•

allow for an equitable distribution of the tax burden

in districts that lie in more than on county, and

• provide a comparable base of r the applications

of tax rate and bonded indebtedness limitations

for units of local government

Equalization of assessment levels within counties,

intra-county equalization, is necessary to achieve

equitable distribution of the tax burden, prior to

IDOR’s inter-county equalization. Local assessing

ofﬁcials are responsible for using the assessment/

sales ratio study to evaluate their assessment poli-

cies and to make any changes needed to ensure

that ﬁnal assessments of all properties within their

jurisdictions reﬂect a uniform percentage of value.

Do all counties use intra-county equalization?

No.

Every county but Cook County possesses

this intra-county equalization authority. Township

assessors, chief county assessment ofﬁcers, and

county boards of review use equalization within the

county only (intra-county equalization). Local as-

sessment ofﬁcials may equalize assessments within

the county by class, area, and/or by township in or-

der to ensure that the median level of assessments

is at 33

1/3

percent of market value (fair cash value).

Why do local assessors and boards of

review issue multipliers?

Local jurisdictions must focus on valuing all property

(uniformly and equitably), assuring all assessed

values represent current market values. The assess-

ment/sales ratio study becomes a tool of the county

to evaluate assessment policies and make assess-

ment changes when warranted. Ideally, the ﬁnal

assessments of all properties in the jurisdictions are

then at a uniform percentage of value to provide an

equitable distribution of the property tax burden.

Does the state force local assessment

ofﬁcials to do local equalization?

No; but the Property Tax Code states that they act

as the equalizing authority.

Factors may be used

to raise or lower assessment levels based on the

county’s independent monitoring of property trans-

fers, based on results of the sales ratio study per-

formed by IDOR, or based on the tentative multi-

plier certiﬁcation.

For example, a township assessor who monitors

sales within a particular development may note

that

the sales prices are increasing and will apply a fac-

tor to ensure that the development is assessed at the

statutory level. Chief County Assessment Ofﬁcers and

County Boards of Review may notice similar trends.

Factors can be applied based on a geographic area

(e.g., neighborhood, township), property character-

istics (e.g., lakefront lots, lots near a golf course), or

type of property (e.g., residential, commercial).

Similarly, if IDOR’s sales ratio study and tentative mul-

tiplier calculations indicate that a particular township

is under-assessed, then local assessment ofﬁcials

have two options: correct the assessment level for

the particular township (to raise assessments to 33

1/3

percent) or do nothing and apply the state multiplier to

all properties. If the second option is chosen, the result

is that properties already assessed at 33

1/3

percent

will be assessed at a higher percentage. IDOR’s role

is to ensure that the county-wide assessment level, on

average, is 33

1/3

percent.

PUB-136 (R-04/16); (reformatted 05/19)

Page 17 of 23

Property Assessment and Equalization

Must IDOR equalize assessments?

Yes. IDOR is required by law to provide for each

county an equalization factor which will equalize

the level of assessments at the statutory level of

1/3

percent of fair market value. The level of as-

sessments to be equalized is the mean, or aver-

age, of the urban-weighted medians of the three

years immediately before the assessment year,

after adjustments for assessment changes through

the assessment year.

Why is IDOR required to issue a state

multiplier?

The purpose of the state multiplier is to equalize

assessments between counties (inter-county equal-

ization). Inter-county equalization eliminates certain

tax burden inequities among taxpayers who live

within the boundaries of taxing districts that overlap

two or more counties. It is not, however, a substitute

for proper intra-county equalization by local ofﬁcials.

IDOR's emphasis is slightly different from local con-

cerns. The state's concern is developing inter-county

equalization and does not focus on inconsistencies

that may exist among individual properties.

How does the state calculate the county-

wide multiplier?

As explained on Page 7, IDOR uses informa-

tion from the Real Estate Transfer Declarations

(RETD’s) to develop sales ratio studies. Assessed

values from the Tentative Abstract are used to com-

pute the tentative multiplier and assessed values

from the Final Abstract are used to compute the

ﬁnal multiplier. If the average three-year level of as-

sessments for a county is less than 33

1/3

percent,

IDOR will certify an equalization factor (multiplier)

greater than 1.0000 to bring the counties assess-

ments levels, on average, to a uniform level of

market value. If the average three-year level of as-

sessments is greater than 33

1/3

percent, IDOR will

certify an equalization factor less than 1.0000 to

bring the counties assessments levels, on average,

to a uniform level of market value.

How is the state multiplier computed?

The preferred method is to divide the county’s total

assessed value reported to IDOR by the county’s

total estimated full value (based on the assessment

levels from the sales ratio study). Only non-farm

values are used.

Which years of sales are used when the

multiplier is calculated?

Sales from the three years immediately before the

year for which the multiplier is calculated are used.

For example, the 2015 multiplier is based on the

sales ratio studies from sales in 2012, 2013, and

2014. Because the sales ratio study compares the

prior year assessed value to the current year sell-

ing price, any reassessment work by the township

assessor, CCAO, and BOR in subsequent years

is also used when the multiplier is calculated. In

essence, the ratios are adjusted so that “credit” is

given when property is reassessed or local equal-

ization factors are applied.

Why are three years’ worth of sales

ratios used?

Using sales ratios from three years provides some

predictability when the market is ﬂuctuating. It

prevents extreme changes from happening in one

year. When the market is rising rapidly, the effect is

to “smooth” out the increases and owners are not

forced to pay a dramatic increase in a single year.

The same is true when the market decreases. This

helps taxing districts with determining their budgets

and how much must be raised from property taxes.

How does the state multiplier affect as-

sessments?

The county clerk must multiply the assessed value

of each parcel of non-farm property, as corrected

and equalized by local assessment ofﬁcers or the

county BOR, by the state certiﬁed Multiplier.

Example based on a $90,000 home:

County A - Multiplier is 1.0000

Home assessed at $30,000 with an EAV of $30,000

($30,000 x 1.0000 = $30,000)

County B - Multiplier is 2.0000

Home assessed at $15,000 with an EAV of $30,000.

($15,000 x 2.0000 = $30,000)

Equalization has eliminated the effects of the origi-

nal underassessment in County B by the use of

the equalization factor (multiplier). This new value

is called the “equalized assessed value.” By law,

the equalization factor (multiplier) is not applied to

farm acreage, farm buildings, or coal rights, which

are assessed using alternate assessment methods

speciﬁed in Illinois law.

Property Assessment and Equalization

PUB-136 (R-04/16); (reformatted 05/19)

Page 18 of 23

Adjusted 2009 Adjusted 2010 Raw Ratios (from

2011 study)

2012 multiplier

+ Assessor (2012

adjustments)

+ Assessor (2012

adjustments)

+ Assessor (2012

adjustments)

+ BOR (2012

adjustments)

+ BOR (2012

adjustments)

+ BOR (2012

adjustments)

= Adjusted 2009 = Adjusted 2010 = Adjusted 2011 = 3 YEARS = 3

YEAR RATIO

Adjusted 2010 Adjusted 2011 Raw Ratios (from

2012 study)

2013 multiplier

+ Assessor (2013

adjustments)

+ Assessor (2013

adjustments)

+ Assessor (2013

adjustments)

+ BOR (2013

adjustments)

+ BOR (2013

adjustments)

+ BOR (2013

adjustments)

= Adjusted 2010 = Adjusted 2011 = Adjusted 2012 = 3 YEARS = 3

YEAR RATIO

Adjusted 2011 Ajusted 2012 Raw Ratios (from

2013 study)

2014 multiplier

+ Assessor (2014

adjustments)

+ Assessor (2014

adjustments)

+ Assessor (2014

adjustments)

+ BOR (2014

adjustments)

+ BOR (2014

adjustments

+ BOR (2014

adjustments

Adjusted 2011 Adjusted 2012 Adjusted 2013 = 3 YEARS = 3

YEAR RATIO

PUB-136 (R-04/16); (reformatted 05/19)

Page 19 of 23

Property Assessment and Equalization

Property Tax Code

(35 ILCS 200/1-1)

Sec. 1-1. Short title. This Act may be cited as the Property Tax Code.

(Source: P.A. 88 455.)

Deﬁnes “fair cash value”

(35 ILCS 200/1-50)

Sec. 1-50. Fair cash value. The amount for which a property

can be sold in the due course of business and trade, not under

duress, between a willing buyer and a willing seller.

(Source: P.A. 88 455.)

Deﬁnes “33

1/3

percent”

(35 ILCS 200/1-55)

Sec. 1-55. 33

1/3

%. One third of the fair cash value of property,

as determined by the Department's sales ratio studies for the 3

most recent years preceding the assessment year, adjusted to

take into account any changes in assessment levels implement-

ed since the data for the studies were collected.

(Source: P.A. 86 1481; 87-877; 88-455.)

Deﬁnes “property”

(35 ILCS 200/1-130)

Sec. 1-130. Property; real property; real estate; land; tract; lot.

The land itself, with all things contained therein, and also all build-

ings, structures and improvements, and other permanent ﬁxtures

thereon, including all oil, gas, coal, and other minerals in the

land and the right to remove oil, gas and other minerals, exclud-

ing coal, from the land, and all rights and privileges belonging

or pertaining thereto, except where otherwise speciﬁed by this

Code. Not included therein are low-income housing tax credits

authorized by Section 42 of the Internal Revenue Code, 26 U.S.C.

42.

(Source: P.A. 91 502, eff. 8 13 99.)

Supervisor of Assessments

(35 ILCS 200/Art. 3 heading)

Article 3. County Assessment Ofﬁcials

Sec. 3-5.

Supervisor of assessments. In counties with less than 3,000,000 in-

habitants and in which no county assessor has been elected under

Section 3-45, there shall be a county supervisor of assessments,

either appointed as provided in this Section, or elected.

In counties with less than 3,000,000 inhabitants and not having

an elected county assessor or an elected supervisor of assess-

ments, the ofﬁce of supervisor of assessments shall be ﬁlled by

appointment by the presiding ofﬁcer of the county board with the

advice and consent of the county board.

To be eligible for appointment or to be eligible to ﬁle nomination

papers or participate as a candidate in any primary or general elec-

tion for, or be elected to, the ofﬁce of supervisor of assessments, or

to enter upon the duties of the ofﬁce, a person must possess one of

the following qualiﬁcations as certiﬁed by the individual to the county

clerk:

(1) A Certiﬁed Illinois Assessing Ofﬁcial certiﬁcate from the

Illinois Property Assessment Institute, plus the additional training

required for additional compensation under Section 4-10.

(2) A Certiﬁed Assessment Evaluator certiﬁcate from the

International Association of Assessing Ofﬁcers.

(3) A Member of the Appraisal Institute (MAI), Residential

Member (RM), Senior Real Estate Analyst (SREA), Senior Real

Property Analyst (SRPA) or Senior Residential Analyst (SRA) certiﬁ-

cate from the Appraisal Institute or its predecessor organizations.

(4) If the person has served as a supervisor of assessments

for 12 years or more, a Certiﬁed Illinois Assessing Ofﬁcial certiﬁcate

from the Illinois Property Assessment Institute with a minimum of

Applicable Statutes

360 additional hours of successfully completed courses approved by

the Department if at least 180 of the course hours required a written

examination.

In addition, a person must have had at least 2 years’ experience

in the ﬁeld of property sales, assessments, ﬁnance or appraisals

and must have passed an examination conducted by the Depart-

ment to determine his or her competence to hold the ofﬁce. The

examination may be conducted by the Department at a convenient

location in the county or region. Notice of the time and place shall

be given by publication in a newspaper of general circulation in the

counties, at least one week prior to the exam. The Department shall

certify to the county board a list of the names and scores of persons

who pass the examination. The Department may provide by rule

the maximum time that the name of a person who has passed the

examination will be included on a list of persons eligible for appoint-

ment or election. The term of ofﬁce shall be 4 years from the date of

appointment and until a successor is appointed and qualiﬁed.

(Source: P.A. 92-667, eff. 7-16-02.)

IDOR responsibility to equalize assessments

(35 ILCS 200/Art. 8 heading)

Article 8. Department of Revenue

Sec. 8-5. General duties. The Department shall:

(1) Direct and supervise the assessment of all property so that

all assessments are made relatively just and equal.

(2) Confer with, advise and assist local assessment ofﬁcers

relative to the performance of their duties.

(3) Prescribe for assessment ofﬁcers general rules, relative to

the assessment of property, which rules shall be binding upon

all assessment ofﬁcers until reversed, annulled or modiﬁed by a

court of competent jurisdiction.

(4) Prescribe or approve forms for returns, reports, complaints,

notices and other documents, and the contents of required ﬁles

and records authorized or required by law or by rule and regula-

tion of the Department. All assessing ofﬁcers shall use true cop-

ies of such forms or reasonable electronic facsimiles of them.

(5) Assess all property owned by or used by railroad compa-

nies operating within this State, except non-carrier real estate.

(6) Equalize the assessment of property among the different

counties of the State and ﬁx the aggregate amount of the as-

sessment for each county upon which taxes shall be extended in

each year; and publish a statement of the methods and proce-

dures used in making such equalization.

(7) Keep a correct record of its acts relative to the assessment

of property and the equalization of assessments. The record

shall be available for public inspection and copies shall be dis-

tributed to any person upon request and payment of the cost of

reproduction.

(8) Grant or deny non-homestead exemptions under Sections

16-70 and 16-130.

(Source: P.A. 91-357, eff. 7-29-99.)

Statutory level of assessments

(35 ILCS 200/Art. 9 Div. 4 heading)

Division 4. Valuation procedures

Sec. 9-145. Statutory level of assessment. Except in counties

with more than 200,000 inhabitants which classify property for

purposes of taxation, property shall be valued as follows:

(a) Each tract or lot of property shall be valued at 33 1/3%

of its fair cash value.

Property Assessment and Equalization

PUB-136 (R-04/16); (reformatted 05/19)

Page 20 of 23

(b) Each taxable leasehold estate shall be valued at 33

1/3% of its fair cash value.

of way of any canal, railroad or other company leased or granted

to another company or person for a term of years, shall be val-

ued at 33 1/3% of its fair cash value.

(d) Any property on which there is a coal or other mine, or

stone or other quarry, shall be valued at 33 1/3% of its fair cash

value. Oil, gas and other minerals, except coal, shall have value

and be assessed separately at 33 1/3% of the fair cash value

of such oil, gas and other minerals. Coal shall be assessed

separately at 33 1/3% of the coal reserve economic value, as

provided in Sections 10-170 through 10-200.

(e) In the assessment of property encumbered by public

easement, any depreciation occasioned by such easement shall

be deducted in the valuation of such property. Any property

dedicated as a nature preserve or as a nature preserve buffer

under the Illinois Natural Areas Preservation Act, for the pur-

poses of this paragraph, is encumbered by a public easement

and shall be depreciated for assessment purposes to a level at

which its valuation shall be $1 per acre or portion thereof.

This Section is subject to and modiﬁed by Sections 10-110

through 10-140 and 11-5 through 11-65.

(Source: P.A. 91-497, eff. 1-1-00.)

Township assessor or CCAO authority to equalize assess-

ments within or between townships or by class of property

(35 ILCS 200/9-205)

Sec. 9-205. Equalization. When deemed necessary to equalize

assessments between or within townships or between classes

of property, or when deemed necessary to raise or lower

assessments within a county or any part thereof to the level

prescribed by law, changes in individual assessments may be

made by a township assessor or chief county assessment ofﬁ-

cer, under Section 9-75, by application of a percentage increase

or decrease to each assessment.

(Source: P.A. 81-1034; 88-455.)

County equalization by CCAO

(35 ILCS 200/9-210)

Sec. 9-210. Equalization by chief county assessment ofﬁcer;

counties of less than 3,000,000. The chief county assessment

ofﬁcer in a county with less than 3,000,000 inhabitants shall act

as an equalizing authority for each county in which he or she

serves. The ofﬁcer shall examine the assessments in the county

and shall equalize the assessments by increasing or reducing

the entire assessment of property in the county or any area

therein or of any class of property, so that the assessments will

be at 33 1/3% of fair cash value. The equalization process and

analysis described in this Section shall apply to all property ex-

cept farm and coal properties assessed under Sections 10-110

through 10-140 and 10-170 through 10-200.

For each township or assessment district in the county, the

supervisor of assessments shall annually determine the per-

centage relationship between the estimated 33 1/3% of the

fair cash value of the property and the assessed valuations at

which the property is listed for each township, multi-township or

assessment district. To make this analysis, he or she shall use

property transfers, property appraisals, and other means as he

or she deems proper and reasonable.

With the ratio determined for each township or assessment

district, the supervisor of assessments shall then determine the

percentage to be added to or deducted from the aggregate as-

sessments in each township or assessment district, other than

property assessed under Sections 10-110 through 10-140 and

10-170 through 10-200, in order to produce a ratio of assessed

value to fair cash value of 33 1/3%. That percentage shall be

issued as an equalization factor for each township or assess-

ment district within each county served by the chief county

assessment ofﬁcer. The assessment ofﬁcer shall then change

the assessment of each parcel of property by application of the

equalization factor.

(Source: P.A. 88-455; 88-670, eff. 12-2-94.)

Publication of BOR equalization factor

(35 ILCS 200/12-40)

Sec. 12-40. Notice provisions; equalization by board of review.

The assessment of any class of property or of any township

or multi-township or part thereof, or any portion of the county,

shall not be increased by an equalization factor applied by a

board of review until the board has made one publication of

notice in a newspaper of general circulation published in the

county, of such proposed increase and has given an oppor-

tunity to be heard, within 20 days of the publication date, to

the owners of the property affected or any one representing

them, and other citizens of the territory. The assessor or chief

county assessment ofﬁcer shall have like opportunity to be

heard thereon, except where such action is taken in individual

cases upon complaint. The board shall hear any person, upon

request, in opposition to a proposed reduction in the assess-

ment of any person or territory.

(Source: P.A. 86-345; 86-413; 86-1028; 86-1481; 88-455.)

Mailed notice to property owner of BOR equalization factor

(35 ILCS 200/12-50)

Sec. 12-50. Mailed notice to taxpayer after change by board of

review or board of appeals. In counties with less than 3,000,000

inhabitants, if ﬁnal board of review or board of appeals action

regarding any property, including equalization under Section

16-60 or Section 16-65, results in an increased or decreased

assessment, the board shall mail a notice to the taxpayer whose

property is affected by such action, at his or her address as it

appears on the complaint, unless the taxpayer has been rep-

resented in the appeal by an attorney, in which case the notice

shall be mailed to the attorney, and in the case of a complaint

ﬁled with a board of review under Section 16-25 or 16-115, the

board shall mail a notice to the taxing body ﬁling the complaint.

In counties with 3,000,000 or more inhabitants, the board shall

provide notice by mail, or by means of electronic record, to the

taxpayer whose property is affected by such action, at his or her

address or e-mail address as it appears in the assessment re-

cords or a complaint ﬁled with the board, unless the taxpayer has

been represented in the appeal by an attorney, in which case

the notice shall be mailed or e-mailed to the attorney, and, in the

case of a complaint ﬁled with a board of review under Section

16-125 or 16-115, the board shall provide notice to the taxing

body ﬁling the complaint. A copy shall be given to the assessor

or chief county assessment ofﬁcer if his or her assessment was

reversed or modiﬁed by the board. Written notice shall also be

given to any taxpayer who ﬁled a complaint in writing with the

board and whose assessment was not changed. The notice shall

set forth the assessed value prior to board action; the assessed

value after ﬁnal board action but prior to any equalization; and

the assessed value as equalized by the board, if the board

equalizes. This notice shall state that the value as certiﬁed to the

county clerk by the board will be the locally assessed value of

the property for that year and each succeeding year, unless re-

vised in a succeeding year in the manner provided in this Code.

The written notice shall also set forth speciﬁcally the facts upon

which the board’s decision is based. In counties with less than

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Property Assessment and Equalization

3,000,000 inhabitants, the notice shall also contain the follow-

ing statement: “You may appeal this decision to the Property Tax

Appeal Board by ﬁling a petition for review with the Property Tax

Appeal Board within 30 days after this notice is mailed to you or

your agent, or is personally served upon you or your agent”. In

counties with 3,000,000 or more inhabitants, the notice shall also

contain the following statement: “You may appeal this decision

to the Property Tax Appeal Board by ﬁling a petition for review

with the Property Tax Appeal Board within 30 days after the date

of this notice or within 30 days after the date that the Board of

Review transmits to the county assessor pursuant to Section

16-125 its ﬁnal action on the township in which your property is

located, whichever is later”. The Board shall publish its transmit-

tal date of ﬁnal action on each township in at least one newspa-

per of general circulation in the county. The changes made by

this amendatory Act of the 91st General Assembly apply to the

1999 assessment year and thereafter.

(Source: P.A. 97-1054, eff. 1-1-13.)

BOR equalization authority after publication

(35 ILCS 200/16-60)

Sec. 16-60. Equalization within counties - Publication and hear-

ing. After notice and hearing as required by Section 12-40, the

board of review may increase or reduce the entire assessment,

or the assessment of any class included therein, if, in its opinion,

the assessment has not been made upon the proper basis. The

board may also equalize the assessment in any multi-township

or township, or part thereof, or any portion of the county.

(Source: P.A. 86-345; 86-413; 86-1028; 86-1481; 88-455.)

BOR equalization process

(35 ILCS 200/16-65)

Sec. 16-65. Equalization process. The board of review shall act

as an equalizing authority, if after equalization by the supervi-

sor of assessments the equalized assessed value of property in

the county is not 33 1/3% of the total fair cash value. The board

shall, after notice and hearing as required by Section 12-40,

lower or raise the total assessed value of property in any assess-

ment district within the county so that the property, other than

farm and coal property assessed under Sections 10-110 through

10-140 and Sections 10-170 through 10-200, will be assessed at

33 1/3% of its fair cash value.

For each assessment district of the county, the board of review

shall annually determine the percentage relationship between

the valuations at which property other than farm and coal prop-

erty is listed and the estimated 33 1/3% of the fair cash value of

such property. To make this analysis, the board shall use at least

25 property transfers, or a combination of at least 25 property

transfers and property appraisals, such information as may be

submitted by interested taxing bodies, or any other means as it

deems proper and reasonable. If there are not 25 property trans-

fers available, or if these 25 property transfers do not represent

a fair sample of the types of properties and their proportional

distribution in the assessment district, the board shall select a

random sample of properties of a number necessary to provide

a combination of at least 25 property transfers and property

appraisals as much as possible representative of the entire as-

sessment district, and provide for their appraisal. The township or

multi-township assessor shall be notiﬁed of and participate in the

deliberations and determinations.

In assessment year 2011, the board of review shall consider

compulsory sales in its equalization process.

The board of review, in conjunction with the chief county

assessment ofﬁcer, shall determine the number of compulsory

sales from the prior year for the purpose of revising and correct-

ing assessments. The board of review shall determine if the num-

ber of compulsory sales is at least 25% of all property transfers

within the neighborhood, township, multi-township assessment

district, or other speciﬁc geographic region in the county for

that class of property, but shall exclude from the calculation (i)

all property transfers for which the property characteristics and

condition are not the same as those characteristics and condi-

tion used to determine the assessed value and (ii) any property

transfer that is not an arm’s length transaction based on exist-

ing sales ratio study standards (except for compulsory sales).

If the board determines that the number of compulsory sales is

at least 25% of all property transfers within the deﬁned geo-

graphic region for that class of property, then the board of review

must determine (i) the median assessment level of arm’s length

transactions and (ii) the median assessment level of compulsory

sales. If the median assessment level of compulsory sales is

higher than the median assessment level of arm’s length trans-

actions, then compulsory sales shall be included in the arm’s

length transaction study and the board must calculate the new

median assessment level. Assessed values of properties within

the speciﬁc geographic area for that class of property must be

revised to reﬂect this new median assessment level. The revised

median assessment level shall be the basis for equalization as

otherwise provided in this Section.

With the ratio determined for each assessment district, the

board shall ascertain the amount to be added or deducted

from the aggregate assessment on property subject to local

assessment jurisdiction, other than farm and coal property, to

produce a ratio of assessed value to 33 1/3% of the fair cash

value equivalent to 100%. However, in determining the amount

to be added to the aggregate assessment on property subject

to local jurisdiction in order to produce a ratio of assessed value

to 33 1/3% of the fair cash value equivalent to 100%, the board

shall not, in any one year, increase or decrease the aggregate

assessment of any assessment district by more than 25% of the

equalized valuation of the district for the previous year, except

that additions, deletions or depletions to the taxable property

shall be excluded in computing the 25% limitation. The board

shall complete the equalization by the date prescribed in Section

16-35 for the board’s adjournment, and, within 10 days thereaf-

ter, shall report the results of its work under this Section to the

Department. At least 30 days prior to its adjournment, the board

shall publish a notice declaring whether it intends to equalize

assessments as provided in this Section. The notice shall be

published in a newspaper of general circulation in the county. If

the board fails to report to the Department within the required

time, or if the report discloses that the board has failed to make

a proper and adequate equalization of assessments, the Depart-

ment shall direct, determine, and supervise the assessment so

that all assessments of property are relatively just and equal as

provided in Section 8-5.

(Source: P.A. 96-1083, eff. 7-16-10.)

State equalization process (equalization among counties)

(35 ILCS 200/Art. 17 heading)

Article 17. State Equalization Process

Sec. 17-5. Equalization among counties. The Department shall

act as an equalizing authority. It shall examine the abstracts of

property assessed for taxation in the counties and in the assess-

ment districts in counties having assessment districts, as re-

turned by the county clerks, and shall equalize the assessments

between counties as provided in this Code. Except as hereinafter

provided, the Department shall lower or raise the total assessed

value of property in each county as returned by the county clerk,

other than property assessed under Sections 10-110 through

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Property Assessment and Equalization

PUB-136 (R-04/16); (reformatted 05/19)

Page 22 of 23

10-140 and 10-170 through 10-200, so that the property will be

assessed at 33 1/3% of its fair cash value.

The Department shall annually determine the percentage

relationship, for each county of the State, between the valuations

at which locally-assessed property, other than property assessed

under the Sections 10-110 through 10-140 and 10-170 through

10-200, as listed by assessors and revised by boards of review,

and the estimated 33 1/3% of the fair cash value of the property.

To make this analysis, the Department shall use property trans-

fers, property appraisals, and other means as it deems proper

and reasonable.

With the ratio determined for each county, the Department

shall then determine the percentage to be added to or deducted

from the aggregate reviewed assessment on property subject

to local assessment jurisdiction, other than property assessed

under the Sections cited above, to produce a ratio of assessed

value to 33 1/3% of the fair cash value equivalent to 100%.

(Source: P.A. 91-555, eff. 1-1-00.)

Sales ratio studies

(35 ILCS 200/17-10)

Sec. 17-10. Sales ratio studies. The Department shall moni-

tor the quality of local assessments by designing, preparing

and using ratio studies, and shall use the results as the basis

for equalization decisions. In compiling sales ratio studies, the

Department shall exclude from the reported sales price of any

property any amounts included for personal property and, for

sales occurring through December 31, 1999, shall exclude seller

paid points. The Department shall not include in its sales ratio

studies sales of property which have been platted and for which

an increase in the assessed valuation is restricted by Section

10-30. The Department shall not include in its sales ratio studies

the initial sale of residential property that has been converted to

condominium property. The Department shall include compulsory

sales occurring on or after January 1, 2011 in its sales ratio stud-

ies. The Department shall also consider whether the compulsory

sale would otherwise be considered an arm’s length transaction,

based on existing sales ratio study standards.

When the declaration required under the Real Estate Transfer

Tax Law contains ﬁnancing information required under Section

31-25, the Department shall adjust sales prices to exclude seller-

paid points and shall adjust sales prices to “cash value” when

seller related ﬁnancing is used that is different than the prevail-

ing cost of cash. The prevailing cost of cash for sales occurring

on or after January 1, 1992 shall be established as the monthly

average 30-year ﬁxed Primary Mortgage Market Survey rate for

the North Central Region as published weekly by the Federal

Home Loan Mortgage Corporation, as computed by the Depart-

ment, or such other rate as determined by the Department. This

rate shall be known as the survey rate. For sales occurring on or

after January 1, 1992, through December 31, 1999, adjustments

in the prevailing cost of cash shall be made only after the survey

rate has been at or above 13% for 12 consecutive months and

will continue until the survey rate has been below 13% for 12

consecutive months. For sales occurring on or after January 1,

2000, adjustments for seller paid points and adjustments in the

prevailing cost of cash shall be made only after the survey rate

has been at or above 13% for 12 consecutive months and will

continue until the survey rate has been below 13% for 12 con-

secutive months. The Department shall make public its adjust-

ment procedure upon request.

(Source: P.A. 96-1083, eff. 7-16-10.)

Tentative equalization factor

(35 ILCS 200/17-15)

Sec. 17-15. Tentative equalization factor. The Department shall

forward to the County Clerk of each county in each year its es-

timate of the percentage, established under Section 17-5, to be

added to or deducted from the aggregate of the locally assessed

property in that county, other than property assessed under Sec-

tions 10-110 through 10-140 and 10-170 through 10-200. The

percentage relationship to be certiﬁed to each county by the De-

partment as provided by Section 17-25 shall be determined by

the ratio between the percentage estimate so made and forward-

ed, as provided by this Section, and the level of assessments of

the assessed valuations as made by the assessors and thereaf-

ter ﬁnally revised by the board of review of that county. Such es-

timate shall be forwarded by the Department to the County Clerk

of any County within 15 days after the chief county assessment

ofﬁcer ﬁles with the Department an abstract of the assessments

of the locally assessed property in the county, as ﬁnally revised.

The abstract shall be in substantially the same form as required

of the County Clerk by Sections 9-250 and 9-255 after comple-

tion of the revisions thereafter to be made by the board of review

of the county, except that the abstract shall specify separately

the amount of omitted property, and the amount of improvements

upon property assessed for the ﬁrst time in that year. The chief

county assessment ofﬁcer shall forward the abstract to the De-

partment within 30 days after returning the county assessment

books to the county board of review.

(Source: P.A. 91-555, eff. 1-1-00.)

Tentative equalization factor hearing

(35 ILCS 200/17-20)

Sec. 17-20. Hearing on tentative equalization factor. The Depart-

ment shall, after publishing its tentative equalization factor and

giving notice of hearing to the public in a newspaper of general

circulation in the county, hold a hearing on its estimate not less

than 10 days nor more than 30 days from the date of the publi-

cation. The notice shall state the date and time of the hearing,

which shall be held in either Chicago or Springﬁeld, the basis for

the estimate of the Department, and further information as the

Department may prescribe. The Department shall, after giving

a hearing to all interested parties and opportunity for submitting

testimony and evidence in support of or adverse to the estimate

as the Department considers requisite, either conﬁrm or revise

the estimate so as to correctly represent the considered judg-

ment of the Department respecting the estimated percentage

to be added to or deducted from the aggregate assessment

of all locally assessed property in the county except property

assessed under Sections 10-110 through 10-140 or 10-170

through 10-200. Within 30 days after the conclusion of the hear-

ing the Department shall mail to the County Clerk, by certiﬁed

mail, its determination with respect to such estimated percentage

to be added to or deducted from the aggregate assessment.

(Source: P.A. 91-555, eff. 1-1-00.)

Application of equalization factor

(35 ILCS 200/17-25)

Sec. 17-25. Application of ﬁnal equalization factor. The as-

sessments of all property, other than property assessed under

Sections 10-110 through 10-140 and 10-170 through 10-200, as

returned by the county clerks, shall be equalized by adding to

the aggregate assessed value thereof in every county in which

the Department ﬁnds the valuation to be less than 33 1/3% of the

fair cash value of the property, the rate per cent which will raise

Applicable Statutes (continued)

PUB-136 (R-04/16); (reformatted 05/19)

Page 23 of 23

Property Assessment and Equalization

the aggregate assessed valuation to 33 1/3% of fair cash value,

and by deducting from the aggregate assessed value thereof, in

every county in which the Department ﬁnds the valuation to be

more than 33 1/3% of the fair cash value, the rate per cent which

will reduce the aggregate assessed valuation to 33 1/3% of fair

cash value.

However, no equalization factor shall be certiﬁed by the De-

partment to raise or reduce the aggregate assessed value of any

county in which the aggregate assessed value of property other

than that assessed under the Sections cited above, is more than

99% and less than 101% of 33 1/3% of fair cash value.

(Source: P.A. 91-555, eff. 1-1-00.)

Certiﬁcation of ﬁnal equalization factor

(35 ILCS 200/17-30)

Sec. 17-30. Certiﬁcation of ﬁnal equalization factor. When the

Department has completed its equalization of assessments in

each year, it shall certify to each county clerk the percentage

ﬁnally determined by it to be added to or deducted from the listed

or assessed valuation of property in the county as returned by

the county clerk.

(Source: P.A. 91-555, eff. 1-1-00.)

Publication of ﬁnal equalization factor

(35 ILCS 200/17-40)

Sec. 17-40. Publication of ﬁnal equalization factor. The Depart-

ment shall publish in each county the percentage and equaliza-

tion factor certiﬁed to each county clerk under Section 17-30.

If the percentage differs from the percentage derived from the

initial estimate certiﬁed under Section 17-15, a statement as to

the basis for the ﬁnal percentage shall also be published. The

Department shall provide the statement to any member of the

public upon request.

(Source: P.A. 79-703; 88-455.)

County clerk applies ﬁnal equalization factor

(35 ILCS 200/18-40)

Sec. 18-40. Application of equalization factor. Each county clerk

shall apply the percentages certiﬁed by the Department and

enter the equalized valuations in the columns provided for that

purpose. The percentages certiﬁed by the Department shall be

applied to the assessed valuation of property, as corrected and

equalized by the board of review, board of appeals, or local as-

sessment ofﬁcers. In all cases of extension of valuations where

the equalized valuations are fractional, the clerk shall reject all

fractions that fall below 50¢. Fractions of 50¢ or more shall be

extended as $1.

If the equalized assessed value of any property is less than

$150 for an assessment year, the county clerk may declare the

imposition and collection of all tax for that year to be extended

on the parcel to be unfeasible and cancelled. No tax shall be

extended or collected on the parcel for that year and the parcel

shall not be sold for delinquent taxes.

(Source: P.A. 85-312; 88-455.)

County and state equalization factor printed on tax bill

(35 ILCS 200/20-15)

Sec. 20-15.

Information on bill or separate statement. There shall be printed

on each bill, or on a separate slip which shall be mailed with the

bill:

(a) a statement itemizing the rate at which taxes have been

extended for each of the taxing districts in the county in whose

district the property is located, and in those counties utilizing

electronic data processing equipment the dollar amount of tax

due from the person assessed allocable to each of those taxing

districts, including a separate statement of the dollar amount of

tax due which is allocable to a tax levied under the Illinois Local

Library Act or to any other tax levied by a municipality or town-

ship for public library purposes,

(b) a separate statement for each of the taxing districts

of the dollar amount of tax due which is allocable to a tax levied

under the Illinois Pension Code or to any other tax levied by a

municipality or township for public pension or retirement pur-

poses,

(d) the total amount of tax due, and

(e) the amount by which the total tax and the tax allocable

to each taxing district differs from the taxpayer’s last prior tax bill.

The county treasurer shall ensure that only those taxing

districts in which a parcel of property is located shall be listed on

the bill for that property.

In all counties the statement shall also provide:

(1) the property index number or other suitable description,

(2) the assessment of the property,

(3) the statutory amount of each homestead exemption ap-

plied to the property,

(4) the assessed value of the property after application of

all homestead exemptions,

(5) the equalization factors imposed by the county and by

the Department, and

(6) the equalized assessment resulting from the application

of the equalization factors to the basic assessment.

In all counties which do not classify property for purposes of

taxation, for property on which a single family residence is situ-

ated the statement shall also include a statement to reﬂect the

fair cash value determined for the property. In all counties which

classify property for purposes of taxation in accordance with

Section 4 of Article IX of the Illinois Constitution, for parcels of

residential property in the lowest assessment classiﬁcation the

statement shall also include a statement to reﬂect the fair cash

value determined for the property.

In all counties, the statement must include information that

certain taxpayers may be eligible for tax exemptions, abate-

ments, and other assistance programs and that, for more infor-

mation, taxpayers should consult with the ofﬁce of their township

or county assessor and with the Illinois Department of Revenue.

In all counties, the statement shall include information that

certain taxpayers may be eligible for the Senior Citizens and Per-

sons with Disabilities Property Tax Relief Act and that applica-

tions are available from the Illinois Department on Aging.

In counties which use the estimated or accelerated billing

methods, these statements shall only be provided with the ﬁnal

installment of taxes due. The provisions of this Section create a

mandatory statutory duty. They are not merely directory or dis-

cretionary. The failure or neglect of the collector to mail the bill, or

the failure of the taxpayer to receive the bill, shall not affect the

validity of any tax, or the liability for the payment of any tax.

(Source: P.A. 98-93, eff. 7-16-13; 99-143, eff. 7-27-15.)

Applicable Statutes (continued)