How to Become Farm Tax Exempt in Illinois

Becoming farm tax exempt in Illinois can provide significant benefits for farmers, including reduced property taxes and exemption from certain sales taxes. However, there are specific requirements and procedures that need to be followed to qualify for this exemption. In this article, we will guide you through the process of becoming farm tax exempt in Illinois.

1. Determine if you meet the criteria: To qualify as a farm for tax exemption in Illinois, you must meet certain criteria. The Illinois Department of Revenue defines a farm as a tract of land used for agricultural or horticultural purposes, including the production of crops, livestock, or other agricultural products.

2. Obtain an Agricultural Assessment Application: To apply for farm tax exemption, you need to obtain an Agricultural Assessment Application form from your county’s local assessment office or the Illinois Department of Revenue’s website.

3. Complete and submit the application: Fill out the form accurately and provide all the required information, including the legal description and acreage of the farm, as well as your personal details. Make sure to attach any supporting documents, such as proof of income from farming activities.

4. Include a farm management plan: Depending on the county, you may also need to submit a farm management plan, which outlines your farming activities and demonstrates that the land is being used for agricultural purposes.

5. Pay the application fee: There is usually a small application fee associated with the farm tax exemption application. Check with your county’s assessment office for the specific fee amount.

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6. Await assessment: Once your application is submitted, it will be reviewed by the assessment office. They may conduct a physical inspection of the property to ensure it meets the criteria for farm tax exemption.

7. Receive the exemption: If your application is approved, you will receive a farm tax exemption certificate. This certificate will allow you to claim the property tax exemption and sales tax exemptions for farm-related purchases.

8. Maintain eligibility: It is important to note that farm tax exemption needs to be renewed periodically, usually every one to three years. Ensure that you fulfill the ongoing requirements, such as continuing to use the land for agricultural purposes and providing updated information when requested.

Frequently Asked Questions (FAQs):

1. Can part-time farmers qualify for farm tax exemption?
Yes, as long as the land is used for agriculture or horticultural purposes, part-time farmers can still qualify for farm tax exemption.

2. Are there any income requirements to be eligible for farm tax exemption?
No, there are no specific income requirements to qualify for farm tax exemption in Illinois.

3. Can I apply for farm tax exemption if I lease the land?
Yes, you can still apply for farm tax exemption if you lease the land, as long as you meet the other criteria and use the land for agricultural purposes.

4. How much can I save on property taxes with farm tax exemption?
The amount saved on property taxes varies depending on the assessed value of the land and the applicable tax rates in your county.

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5. Are all farm-related purchases exempt from sales tax?
No, only specific farm-related purchases, such as machinery, equipment, and inputs directly used in agricultural production, are exempt from sales tax.

6. Can I apply for farm tax exemption if my land is zoned for residential purposes?
Generally, if your land is zoned for residential purposes, it may not qualify for farm tax exemption. However, there may be exceptions based on local zoning regulations.

7. What happens if I no longer meet the criteria for farm tax exemption?
If you no longer meet the criteria for farm tax exemption, you should notify the assessment office and the exemption may be revoked.

8. Can I appeal if my application for farm tax exemption is denied?
Yes, if your application is denied, you have the right to appeal the decision. Contact your local assessment office for information on the appeal process.

Becoming farm tax exempt in Illinois can provide valuable financial benefits to farmers. By following the necessary steps and meeting the criteria, you can enjoy reduced property taxes and exemptions on certain farm-related purchases. Consult with your county’s assessment office or the Illinois Department of Revenue for specific guidelines and requirements.

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