Illinois Special Assessment for Solar Energy Systems: A Comprehensive Tax Overview
Solar Energy System Definitions in Illinois
Illinois, through Public Act 100-0781, endorses the use of solar energy systems for their environmental and health benefits.
Key Definitions
Solar Energy: Energy from the sun used for heating, photosynthesis, or generating electricity.
Solar Collector: Devices gathering solar energy for thermal energy or electricity conversion.
Solar Storage Mechanism: Equipment storing solar energy collected by solar collectors for future use.
Solar Energy System: A complete assembly using solar energy for on-site electricity generation or heating/cooling, including the system's design, materials, maintenance, and legal or financial components.
Commercial Solar Energy Systems: Special Provisions
Specific provisions apply to commercial solar energy systems, particularly in less populated counties.
Commercial Solar Energy System Regulations
Definition and Exclusions: Large-scale systems primarily for electricity sale, not consumption on-site, are defined as commercial systems. They exclude components equally usable in conventional energy systems or serving non-solar purposes.
Property Cost Basis: The cost basis for commercial solar systems is set at $218,000 per megawatt of nameplate capacity.
Ground Installation and Trending Factor: Refers to the installation and valuation method for commercial systems, including adjustments based on the Consumer Price Index.
Valuation and Taxation of Commercial Solar Energy Systems
Guidelines for the valuation and taxation of commercial solar energy systems ensure fair assessment.
Assessment and Taxation
Improvement Valuation: Valuation involves subtracting physical depreciation from the trended real property cost basis and considering any functional or external obsolescence.
Non-subjection to Equalization: These systems are exempt from equalization factors applied by assessment authorities.
Parcel Identification and Surveys: Owners must commission a land survey for property assessment purposes.
Real Estate Tax Liability: Owners are liable for real estate taxes on the land and improvements of the solar energy system.
Farmland Reassessment Post-System Removal
Land previously assessed as farmland and then used for solar energy systems can return to farmland assessment post-system removal.
Farmland Assessment
Reassessment as Farmland: Property reassessed as farmland after the removal of the solar system, provided it returns to farm use.
Tax Assessment for Residential Solar Energy Systems
In Illinois, residential solar energy systems also receive special property tax assessment considerations.
Residential Solar Energy System Assessment
Alternate Valuation: The chief county assessment officer ascertains the value of the property with a conventional system and with the solar energy system, using the lesser value for taxation.
Applicability and Effective Dates
The provisions of this Division apply for assessment years 2018 through 2033, defining a long-term framework for solar energy system assessment and taxation.
Duration of Provisions
Effective Period: The Act’s provisions are active from 2018 through 2033, indicating a commitment to solar energy promotion in Illinois.
This comprehensive summary outlines the Illinois Special Assessment for Solar Energy Systems, encompassing commercial and residential solar energy system definitions, regulations, valuation, taxation, and reassessment procedures.
It highlights Illinois' dedication to renewable energy and sustainable practices through detailed property tax considerations for both commercial and residential solar installations.
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