CHICAGO, ILLINOIS THE TAX1 A large amount of local control is present in the property tax system of Illinois as evidenced by the presence of over 1,400 primary assessing areas. This specialized autonomy with hundreds of overlapping districts makes it very difficult for the property owner to find out where his tax money is going and how it is used. Across the state the township is the principal unit for tax purposes. The rate in each area is the aggregate required for county, township, municipal, school, and special district purposes. The State receives no portion of the property tax. PROPERTY SUBJECT TO TAX All real and personal property is subject to tax unless specifically exempt. Intangible personal property is also theoretically taxed at the same rates as tangible property, but it has been customary to assess intangible property of individuals at lower values. Principal exemptions include 1) household furniture and one automobile, 2) a $1,500 homestead tax credit for any dwelling owned or occupied by persons over 65 years of age and 3) homesteads up to $15,000 for disabled veterans. ASSESSMENT The Constitution requires that the property tax be paid in proportion to a property's fair cash value.2 Although the typical unit of tax control is the township, in Cook County an elected county assessor is responsible for assessments in Chicago and for supervision of assessors outside the city. A State Department of Local Government Affairs is required to equalize assessments among the counties, but not among classes, districts, or individuals. In line with the popular notion that it is unfair to tax non-income producing property at the same level of market value as income producing properties, wide discrepancies exist within individual counties. These discrepancies seem to be based more on an ability to pay basis than an evaluation of the amount of services obtained from the community. For example, one- and two-family homes will be assessed at 30% of value, multi-family flats at a higher level. This discrimination is carried over to the personal property tax which is usually collected from businesses. Cook County is divided into 4 assessment districts with assessments subject to equalization in the same manner as counties. A multiplier is used to bring all assessed values in a 1 Revenue Act of 1939, I. 2III. Const. Art IX, Sec 1. county or district up to the state norm. This multiplier for Cook County in 1970 was 1.59. Real property is assessed each year in only one Cook County district. In the other 3 Cook County Districts and most other Illinois counties, assessment takes place quadrennially unless improvements are made or property is damaged. Equalization also takes place only every 4 years. In Cook County the county assessor has permitted listing of personal property at less than full value. Lists of personal property are filed with the county assessor only when he requests them. Any appeals of assessments are handled by the County Board of Appeals. RESTRICTIONS ON TAX POWER Tax rates for all primary assessing areas are subject to State Constitutional or statutory limits. The limits are usually based on population size of the area and do not include debt servicing. The only exception to this general rule is that there is no municipality limit for Chicago. Otherwise, for example, the Cook County rate limit is 7.5 mills and the school district limit 15 mills. Taxation beyond these limits is provided only by specific voter approval. Individual assessing area limitations encourage the continual formation of new taxing districts.1 THE 1970 TAX RATE FOR CHICAGO $68.90 per $1,000 assessed value Assessment nominally targeted at 100% of actual value. See Irving Howard, "Property Tax Rate Limits in Illinois and Their Effect Upon Local Government," National Tax Journal, XVI (Sept. 1963), pp. 285-93. DETROIT, MICHIGAN THE TAX1 The State of Michigan has just under 1,500 primary property tax assessing areas. In this respect it can be compared to Illinois which also has large numbers of overlapping tax districts. The township and the city are the principal units in property assessment. Property is taxed at the aggregate of county, township, municipal school and other district rates. The State receives no revenue from the property tax. PROPERTY SUBJECT TO TAX All tangible and intangible property is subject to tax unless expressly exempt. Principal exemptions include: 1) clothes, 2) household furniture, provisions, and fuel up to $5,000, 3) personal business property up to $500, 4) homesteads of persons over 65 up to $2,500 if their income is less than $6,000, and 5) certain homestead exemptions for soldiers and pensioned or disabled veterans. ASSESSMENT Property is assessed on the basis of 50% of true cash value.2 In 1970 a State Equalization factor of 1.05 was applied to all property assessments in the City of Detroit. A City Board of Review hears all appeals. Further appeals may be taken to the State Tax Commission whose decision is final and cannot be taken to the county. Counties exercise little supervision over the township and city assessors other than performing a yearly equalization. The State Board of Equalization has been abolished. Appeals from equalization by the County Board of Supervisors are also heard at the State level by the State Tax Commission. "The State Tax Commission shall have the same authority to consider and pass upon the action and determination of the Board of Supervisors in equalizing said valuations as it has to consider complaints relative to the assesment and taxation of property.' Local tax assessors are either elected or appointed, depending on the city. Assessors have the power to demand a listing of any taxable property. This return if requested must be accompanied by a sworn statement as to its validity. The City of Detroit requires this property tax return annually. 1Compiled Laws 1948, Chapter 211. 2Mich. Const. Article 9, Sec. 3; Laws 1965, Act 409. 3 Compiled Laws, Sec. 211.152. 4Compiled Laws, Sec. 211.34. 93-996 - 7316 RESTRICTIONS ON TAX POWER The Michigan constitution specifies an overall tax limitation on the sum of all nonmunicipal (charter) taxation of 1.5% of assessed value. This limitation does not apply to debt servicing of school bonds approved by the voters and can also be exceeded by other taxing districts on voter approval. The City of Detroit also has a city charter rate limitation of 2% of assessed valuation for municipal taxation unless a specific increase is approved by the 5 voters. 5 Charter of the City of Detroit, Title VI, Ch. I, Sec. 1. NASHVILLE, TENNESSEE THE TAX1 The property tax in Tennessee is based upon county administration, but charter cities are also empowered to assess and collect their own taxes. There are in all 95 primary assessing areas in the state. The tax rate is the sum of county, municipal, school, and special district rates. The state receives no property tax revenues. PROPERTY SUBJECT TO TAX All real and personal property not specifically exempted is subject to taxation. The principal exemption is a $1,000 personal property credit for each resident taxpayer. This exemption takes on added importance when a recent General Assembly law is noted: "Personal Property... used in the taxpayer's own household together with all intangible property including bank accounts of the taxpayer may be assumed prima facie by the tax assessor to be of a value not in excess of $1,000 in the absence of any tax return or schedule to the contrary."2 This law flies in the face of a constitutional requirement of equality and uniformity of tax valuation throughout the state and has the effect of making only business property subject to personal tax. It has not been tested in court. ASSESSMENT Property is assessed at its fair market value. This assessment occurs annually for personal property and biennially in the odd years for real property for which a value of 50% will be required in 1973. This is to be attained by conforming to the following schedules: 1969, no less than 25%; 1970, 30%; 1971, 35%; 1972, 40%. Both Federal and State courts 3 have recently made rulings that should hasten Tennessee toward uniform assessment." The county or city assessor requires property owners to list their property. Assessments may be appealed to the County Board of Equalization or the Board of City Tax Equalization. Further appeal may be made to the State Board of Equalization which has the power to increase or decrease valuations.3 " ...same (valuation may be revised or changed by the State Board of Equalization."4 ITennessee Code, Title 67; Ch. 1-21 2Tennessee, Public Acts (1959), Ch. 279, Sec. 4, pp. 874-75. 3 Louisville and N.R.R. vs Public Service Commission, 249 F. Supp 894 (1966), Southern Ry vs Clement, Davidson County Chancevy Court II, Book 77 (1966), p.191。 4T.C.A., Sec. 67-809. |