Home > Advocacy > Personal Property Replacement Tax

Personal Property Replacement Tax

May 14th, 2009

Replacement taxes are revenues collected by the state of Illinois and paid to local governments  such as cities, villages, school districts among others, to replace money that was lost by local governments when their powers to impose personal property taxes on corporations, partnerships, and other business entities were taken away in the mid-1970’s.

These taxes resulted when the new Illinois Constitution directed the legislature to abolish business (corporate) personal property taxes and replace the revenue lost by local government units and school districts. In 1979, a law was enacted to provide for statewide taxes to replace the monies lost to local governments – thus the Personal Property Replacement Tax, or the Replacement Tax.

Public libraries existing prior to 1976, and who received a portion of their municipality’s Personal Property Tax, continue to receive their share of the Personal Property Replacement Tax. This includes public libraries which have converted to library district, such as East Alton PLD, and Litchfield PLD.

If the public library or library district did not exist prior to 1976, they do not receive a share of the Replacement Tax. For example, Farmersville-Waggoner PLD and Brighton PL established in the 1980’s so neither library receives a share of the Replacement Taxes.

Illinois Law clearly protects the public library’s portion, see 30 ILCS 115/12 for the complete text,

Any municipality or township, other than a municipality with a population in excess of 500,000, which receives an allocation based in whole or in part on personal property taxes which it levied pursuant to Sections 3‑1, 3‑4 and 3‑6 of the Illinois Local Library Act and which was previously required to be paid over to a public library shall immediately pay over to that library a proportionate share of the personal property tax replacement funds which such municipality or township receives; provided that if such a public library has converted to a library organized under The Illinois Public Library District Act, regardless of whether such conversion has occurred on, after or before January 1, 1988, such proportionate share shall be immediately paid over to the library district which maintains and operates the library. However, any library that has converted prior to January 1, 1988, and which hitherto has not received the personal property tax replacement funds, shall receive such funds commencing on January 1, 1988.

Under state statute, the Illinois Department of Revenue  provides an estimation of the amount of Personal Property Replacement Taxes to be paid for each Fiscal Year.

This is from the Illinois Department of Revenue’s Web site:

Personal Property Replacement Taxes to be allocated for FY 2009 is estimated to be $1,528 million.  This is a decline of 2.1% from FY08’s allocations of $1,561 million.  Replacement tax allocations are estimated to be lower for several reasons, replacement income tax are expected to be flat, invested capital and telecommunication receipts are estimated to decline in FY09.

To see what amounts have been paid to your municipality, check this portion of the Department of Revenue’s Web Site. This information is for Fiscal Year 2008-09, (FY09). Use the Find feature to locate your municipality and learn the estimated amount coming to the municipality.

Comments are closed.