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What is the Property Tax Extension Limitation Law (PTELL)?
The Property Tax Extension Limitation Law (PTELL) limits the amount of tax extensions (total taxes billed) for non-home rule taxing districts. Although the law is commonly referred to as “tax caps,” use of this phrase can be misleading. The PTELL does not “cap” either individual property tax bills or individual property assessments. Instead, the PTELL allows a taxing district to receive a limited inflationary increase in tax extensions on existing property, plus an additional amount for new construction, and voter-approved rate increases. The limitation slows the growth of property tax revenues to taxing districts when property values and assessments are increasing faster than the rate of inflation. As a whole, property owners have some protection from tax bills that increase only because the market value of their property is rising rapidly. Increases in property tax extensions are limited to the lesser of 5 percent or the increase in the consumer price index for the year preceding the levy year. The limitation for a taxing district can be increased with voter approval.
The limitation applies to the portion of a taxing district's total extension that is subject to the limitation (aggregate extension) for funds subject to the PTELL. All funds (including insurance, self-insurance, tort liability, IMRF, audit, and FICA) are subject to the limitation except for those exempted specially in 35 ILCS 200/18-185. Generally, separate limiting rates are not calculated under the PTELL for one or all of the taxing district's funds. The law does allow, however, for separate limiting rates to be calculated in some instances. See 35 ILCS 200/18-195.
If a county clerk is required to reduce the rates under section 18-195, they will proportionally reduce the rate for each fund subject to PTELL. If a taxing district does not want rates reduced proportionally for each fund subject to the PTELL, it must pass a resolution or ordinance that gives specific instructions to the clerk (e.g, to reduce the corporate rate to a dollar amount or to a percentage of the levy).
PTELL is independent of Truth-in-Taxation publications and hearings.
See our Property Tax Extension Law Limit (PTELL) web page for more information.