Tax Terms

Key terms you will need to know for this chapter include:

• Assess: To place a value on property for tax purposes.
  
• Assessment Level: The rate at which property is assessed.
  
• Assessed Valuation or Value: The result of multiplying a property's fair market value with its assessment level.
  
• Equalized Assessed Valuation or Value: The result of multiplying the assessed valuation of a property with the equalization factor.
  
• Equalization Factor: A factor determined each year by the Illinois Department of Revenue to ensure assessments are equal between all counties in the state. This is also known as the "multiplier." 
  
  State law requires that the combined value of assessments within each county must be set at 1/3 the estimated Fair Market Value of real estate in the county.  In other words, the median values of the assessments must be equal to 33 1/3% of the combined value of all property in a county. So, if a county’s combined property value is $10 million, then that particular county’s equalization factor would be set at $3.33 million.
  
• Levy: The total amount of funds requested by a taxing district.
  
• Property Tax: The local tax on the value of real property, land, buildings and homes. These taxes are a major revenue source for funding local services such as schools, libraries, health services, public works and parks.
  
• Tax: A mandatory payment to the government, used to fund services.
  
• Tax Base: The number of resources (i.e. buildings, parcels of land, etc.) available for taxation.
  
• Taxing Body: Government units that collect taxes to fund government services. Examples include the City of Chicago, the Chicago Board of Education and the Chicago Park District.
  
• Tax Code: The specific geographic area taxed by various taxing bodies/districts (i.e. school district, forest preserve, police, sanitation, etc.)
  
• Taxing District:  Local government agencies authorized to tax property within their geographic boundaries. Examples: school districts, park districts, police and fire departments and municipalities.

The above tax terms are compiled from definitions taken from the Cook County Assessor, Cook County Treasurer, Cook County Review Board, Illinois Department of Revenue and Illinois Property Tax Review Board.