December 31, 2015 · 6 Comments
PARIS, IL. (ECWd) –
According to a recent document dump from the Illinois Department of Transportation in relation to a Freedom of Information Act request about certain things happening at the District 5 IDOT Headquarters, it appears they are allowing a private business to utilize office and customer space within D-5 Headquarters Building in Paris, Illinois – and failing to report the non-public use of the tax exempt property to the Edgar County Tax Assessor.
Here is how is appears to be working:
There is a little known Credit Union by the name of “Paris Hi-Way Credit Union” that is receiving either free rent, undocumented rent, or rent without a lease. For the moment, I will assume there is no rent being paid simply because there is no rental agreement or lease agreement.
Not only is no rent being paid, the Credit Union is using the utilities of the people of the State of Illinois – your untilities.
Paris Hi-Way Credit Union
13473 Il Highway 133
Paris, IL 61944
That is the same address as the IDOT District 5 Headquarters in Paris, Illinois.
IDOT has authority to lease real estate
IDOT has the authority, under law, to lease real estate they deem they will not use for a period of time:
Lease of land or property.
(a) The Department has the power from time to time to lease any land or property, with or without appurtenances, of which the Department has jurisdiction and that is not immediately to be used or developed by the State; provided that no such lease be for a longer period of time than that in which it can reasonably be expected the State will not have use for the property, and further provided that no such lease be for a longer period of time than 5 years, except as provided in subsection (b).
The problem is, there is no lease, at least they cannot find one.
Real Estate Tax Exempt Status?
Next, real estate owned by the State of Illinois, or any other government body is exempt from taxes…unless it is not being used for public purposes. For example, if a public body with a government owned building were to lease out office space to a private business, that office space would be subject to real estate taxes, and those taxes would be the responsibility of the private business (the leaseholder).
Searching the Edgar County Assessor’s website, this real estate is listed as 100% tax exempt. There could be several reasons for that, including the State’s failure to notify the county that a portion of their real estate was no longer being used for a public purpose.
The Property Tax Code explains procedures to use in situations such as this:
(a) All property belonging to the State of Illinois is exempt. However, the State agency holding title shall file the certificate of ownership and use required by Section 15-10, together with a copy of any written lease or agreement, in effect on March 30 of the assessment year, concerning parcels of 1 acre or more, or an explanation of the terms of any oral agreement under which the property is leased, subleased or rented.
The leased property shall be assessed to the lessee and the taxes thereon extended and billed to the lessee, and collected in the same manner as for property which is not exempt. The lessee shall be liable for the taxes and no lien shall attach to the property of the State.
It is clear that the State agency only has to provide copies of leases for 1 acre or more of leased property, however, any leased property (no matter the size) shall be assessed and the lessee held responsible for the taxes.
Additionally, annual certifications must be filed with the county and they must also comply with Sections 15-10, 15-15, and 15-20 of the property tax code.
Short of some obscure law that we can’t find, the operation of a private business in a state owned facility without a lease is a violation of the law. In addition, not paying property tax on the business space used robbed the taxpayers of this county their portion of applicable property tax to go towards services for the public.
Indications are that this type of activity is not limited to District 5. We are working on gathering the rest of the information to see how many other operations with this same pattern is happening state wide.
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