Potential Property Tax Relief in Illinois for COVID-19 Damage

Ryan is exploring opportunities for property tax relief in Illinois for COVID-19 damage. Under the Illinois Property Tax Code § 200/13-5, taxpayers may apply for reassessment of any taxable property that was “substantially damaged” by a disaster. The property must be in an area that has been declared a disaster area by either the Governor of Illinois or the President of the United States. The taxpayer must apply for relief within 90 days of the substantial damage or in a county with less than 3,000,000 inhabitants, within 90 days of the mailing date of notice from the assessor.¹

Both the Governor and the President have declared Illinois to be in a state of disaster in response to COVID-19. Because of the spread of COVID-19 and the resulting designation of the entire state as a “disaster area,” properties throughout the state have been rendered “uninhabitable,” which is tantamount to destruction for valuation purposes.² Given the large losses in market value caused by COVID-19, reassessment to reflect those losses presents an opportunity for significant property tax relief.

Reassessment is not guaranteed. No caselaw or other authority has interpreted whether economic damage qualifies for reassessment under Illinois Property Tax Code § 200/13-5. It is uncertain whether the impact of the pandemic qualifies as “substantial damage” sufficient to trigger reassessment. It is possible that Illinois taxing authorities take the position that losses caused by COVID-19 are not “substantial damage.”

If economic damage is sufficient to trigger the reassessment process, the statute implies coordination between an assessor and the local board of review in adjusting an assessment. The statute is unclear as to how and when this coordination would take place. The statute indicates two values need to be determined, a pre- and a post-disaster value. We believe the differential between the two values will vary significantly by property type. Additionally, taxing authorities often interpret tax laws inconsistently with statutory language. However, Ryan is prepared to assist taxpayers in pursuing revaluation vigorously and to take aggressive positions on appeal where it does not occur.

Ryan’s Property Tax and Advocacy teams will closely monitor developments throughout this process and continually report on any activities or changes. We will be consulting with our clients on the best strategy, considering each client’s unique circumstances, maximizing relief under all Illinois administrative, litigation, and appeal remedies.

¹ Illinois Property Tax Code § 200/9-180.
² Illinois Property Tax Code § 200/9-180.

TECHNICAL INFORMATION CONTACTS:

Shane Moncrief
Principal
Ryan
404.942.6377
shane.moncrief@ryan.com

Shawn King
Principal
Ryan
312.980.1127
shawn.king@ryan.com

Michael Davies
Director
Ryan
312.980.1130
michael.davies@ryan.com

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.