Commercial Wind Energy Property Valuation (Illinois)

Summary

Last modified on February 12, 2015.

Financial Incentive Program

Place	Illinois
Name	Commercial Wind Energy Property Valuation
Incentive Type	Property Tax Incentive
Applicable Sector	Commercial, Industrial, Utility
Eligible Technologies	Wind
Active Incentive	Yes
Implementing Sector	State/Territory
Energy Category	Renewable Energy Incentive Programs
Amount	Valuation: 360,000/MW (annually adjusted for inflation) for commercial wind devices larger than 500 kW Depreciation: Up to 70% of the trended real property cost basis
Start Date	2007 Assessment Year
Expiration Date	2016 Assessment Year
Program Administrator	Illinois Department of Commerce and Economic Opportunity
Website	http://www.revenue.state.il.us/LocalGovernment/PropertyTax/windenergydevice.pdf
References	DSIREDatabase of State Incentives for Renewables and Efficiency

Summary

Prior to 2007, wind energy devices generating electricity for commercial sale were assessed differently depending on where they were located. Some counties valued the entire turbine structure (tower plus generation equipment) as "real property", subject to taxation, while others deemed only the tower portion as taxable property. This difference in valuation procedure meant that the taxable value of identical wind turbines could vary by as much as 75% from county to county, creating dramatically different tax loads and complicating projects that cross county lines.

In October 2007 Illinois passed Public Act 095-0644, a law providing consistent valuation procedures for commercial wind farm equipment (amended via HB4797 in 2010). For ten years, beginning in the 2007 assessment year, wind energy devices larger than 500 kilowatts (kW) and producing power for commercial sale will be valued at $360,000/Megawatt (MW) of capacity, annually adjusted for inflation according to the U.S. Consumer Price Index. This figure is termed the trended real property cost basis. Because Illinois assesses property for property tax purposes at 1/3 of its fair cash value, in practice the assessed value of commercial wind energy property is $119,988/MW.

The law also defines an allowance for physical depreciation of the device, calculated by dividing the age of the turbine by 25 and then multiplying the result by the trended real property cost basis. The physical depreciation allowance may not exceed 70% of the trended real property cost basis, though additional depreciation allowances may be granted for functional or external obsolescence.

Incentive Contact

Contact Name	Public Information
Department	Illinois Department of Revenue
Address	Willard Ice Building
Address 2	101 West Jefferson Street
Place	Springfield, Illinois
Zip/Postal Code	62702
Phone	(800) 732-8866
Phone 2	(217) 782-3336
Website	http://www.revenue.state.il.us

Contact Name	Kara Moretto
Department	Illinois Department of Revenue
Division	Local Government Services Bureau
Address	Willard Ice Building
Address 2	101 West Jefferson Street
Place	Springfield, Illinois
Zip/Postal Code	62702
Phone	(800) 732-8866
Email	kara.moretto@illinois.gov
Website	http://www.revenue.state.il.us

Authorities (Please contact the if there are any file problems.)

Authority 1:	§ 35 ILCS 200/10-600 et seq.
Date Effective	2007 Assessment Year
Date Enacted	2007-10-17
Expiration Date	2016 Assessment Year

• Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.