THE BASICS OF THE NON-HOMESTEAD PROPERTY TAX EXEMPTION IN ILLINOIS

●OWNERSHIP ○ WHO OWNS THE PROPERTY? ●USE ○ HOW IS IT USED? TWO THRESHOLD ISSUES

TWO PRIMARY EXEMPTION CATEGORIES RELIGIOUS USE ● 35 ILCS 200/15-40 ● Use Only ● Property used exclusively for “religious purposes, or school and religious purposes, or orphanages CHARITABLE USE ●35 ILCS 200/15-65 ●Use and Ownership ●“Property of...Institutions of Public Charity...Beneficent and Charitable Organizations” ●“when actually and exclusively used for charitable or beneficent purposes”

● Use only, ownership irrelevant ● Examples: Churches, synagogues, meditation centers, parochial schools ● Cannot be “leased or otherwise used with a view to profit” ● Federal recognition not presumptive, but is relevant RELIGIOUS USE EXEMPTION

● Ownership and Use ● Ownership by an Institution of Public Charity, Beneficent and Charitable Organizations… ● “actually and exclusively used for charitable or beneficent purposes and not leased with a view to profit” CHARITABLE USE EXEMPTION

● Five Prong Korzen Analysis o The entity has no capital, capital stock or shareholders o Earns no profit or dividends, but rather derives its funds mainly from public and private charity and holds them in trust for the objects and purposes expressed in its charter CHARITABLE USE - OWNERSHIP

● Korzen Analysis continued o Dispenses charity to all who need and apply for it o Does not provide gain or profit in a private sense to any person connected with it o Does not appear to place obstacles of any character in the way of those who need and would avail themselves of the charitable benefits it dispenses

● If an org. satisfies Korzen analysis then it qualifies as a charitable institution for purposes of the statute ● 501c3 status is probative, not presumptive ● Does the entity own the property? o Equitable Ownership CHARITABLE USE - OWNERSHIP

● “actually and exclusively used for charitable or beneficent purposes, and not leased or used with a view to profit” ● Exclusively = Primarily ● Does the use “serve the public interest and lessen the State’s burden” ● Use overlaps with Korzen guidelines CHARITABLE USE - USE

● Common Sense Approach ● Holistic, Flexible Analysis ● Does the entity meet the Korzen guidelines and act in accordance? CHARITABLE USE - USE

SPECIFIC EXEMPTION CATEGORIES ● schools ● cemetery uses ● property of the US ● property of IL - leasehold exception ● taxing district property ● agricultural or horticultural societies ● military schools and academies ● housing authorities ● public transportation systems ● bi-state development agency ● park conservation districts ● municipal building corporations ● municipal power agencies ● municipal natural gas agencies ● parking area ● public water districts ●library systems and public library districts ●fire protection purposes ●municipal corporations ●exemptions related to access to hospital and health care service by low-income and underserved individuals ●municipal corporations providing railroad terminals ●school districts and community college districts ●metropolitan water reclamation districts ●property of veterans’ organizations ●forest preserve districts ●joliet arsenal development ●port districts ●airport authorities and airports

● Board of Review o designated by statute o not the final decision maker, but the clearinghouse for all documentation ● Illinois Department of Revenue o decision letter o appeal process ● Assessor o implements the exemption o send copy of decision letter to Assessor o Certificates of Error o Annual Affidavit EXEMPTION APPLICATION PROCESS

● Appeal to Illinois Department of Revenue ● Valuation Appeal o Assessor  Incentive Classifications o Board of Review o Circuit Court/PTAB WHAT IF MY EXEMPTION APPLICATION IS DENIED?