ILCS » Chapter 35 · Act 200
Illinois Compiled Statutes

35 ILCS 200/9-195 (2026)

Leasing of exempt property

✓ current as of May 2026
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(35 ILCS 200/9-195)
    (Text of Section WITH the changes made by P.A. 97-1161, which has been held unconstitutional)
    Sec. 9-195. Leasing of exempt property.
    (a) Except as provided in Sections 15-35, 15-55, 15-60, 15-100, 15-103, 15-160, and 15-185, when property which is exempt from taxation is leased to another whose property is not exempt, and the leasing of which does not make the property taxable, the leasehold estate and the appurtenances shall be listed as the property of the lessee thereof, or his or her assignee. Taxes on that property shall be collected in the same manner as on property that is not exempt, and the lessee shall be liable for those taxes. However, no tax lien shall attach to the exempt real estate. The changes made by Public Act 90-562 and by Public Act 91-513 are declaratory of existing law and shall not be construed as a new enactment. The changes made by Public Acts 88-221 and 88-420 that are incorporated into this Section by Public Act 88-670 are declarative of existing law and are not a new enactment.
    (b) The provisions of this Section regarding taxation of leasehold interests in exempt property do not apply to any leasehold interest created pursuant to any transaction described in subsection (e) of Section 15-35, subsection (c-5) of Section 15-60, subsection (b) of Section 15-100, Section 15-103, Section 15-160, or Section 15-185 of this Code or Section 6c of the Downstate Forest Preserve District Act.
(Source: P.A. 99-219, eff. 7-31-15; 99-642, eff. 7-28-16.)
 
    (Text of Section WITHOUT the changes made by P.A. 97-1161, which has been held unconstitutional)
    Sec. 9-195. Leasing of exempt property.
    (a) Except as provided in Sections 15-35, 15-55, 15-60, 15-100, 15-103, and 15-185, when property which is exempt from taxation is leased to another whose property is not exempt, and the leasing of which does not make the property taxable, the leasehold estate and the appurtenances shall be listed as the property of the lessee thereof, or his or her assignee. Taxes on that property shall be collected in the same manner as on property that is not exempt, and the lessee shall be liable for those taxes. However, no tax lien shall attach to the exempt real estate. The changes made by Public Act 90-562 and by Public Act 91-513 are declaratory of existing law and shall not be construed as a new enactment. The changes made by Public Acts 88-221 and 88-420 that are incorporated into this Section by Public Act 88-670 are declarative of existing law and are not a new enactment.
    (b) The provisions of this Section regarding taxation of leasehold interests in exempt property do not apply to any leasehold interest created pursuant to any transaction described in subsection (e) of Section 15-35, subsection (c-5) of Section 15-60, subsection (b) of Section 15-100, Section 15-103, or Section 15-185 of this Code or Section 6c of the Downstate Forest Preserve District Act.
(Source: P.A. 99-219, eff. 7-31-15; 99-642, eff. 7-28-16.)

    
Notes of Decisions
Cited in 9 cases (1 in the last 5 years), 1998–2021 · leading case: Millennium Park Jt. Venture, LLC v. Houlihan, 948 N.E.2d 1 (Ill. 2010).
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Millennium Park Jt. Venture, LLC v. Houlihan, 948 N.E.2d 1 (Ill. 2010). · cites it 7× “Plaintiff entered into a "Concession Permit Agreement" with the Park District in February 2003, which allowed plaintiff to use certain portions of Millennium Park to operate a food concession service. The Property Tax Code authorizes the assessor to tax a lessee's leasehold…”
Millennium Park Jt. Venture, LLC v. Houlihan, 911 N.E.2d 517 (Ill. App. Ct. 2009). “In a November 15, 2006, agreed order, the defendants stipulated that "(a) it is the responsibility of the tax-exempt entity that enters into a contract that it believes creates a taxable leasehold interest under 35 ILCS 200/9-195 to notify the Assessor and provide the Assessor…”
Moline Sch. Dist. No. 40 Bd. of Educ. v. Quinn, 2015 IL App (3d) 140535 (Ill. App. Ct. 2015). “” 35 ILCS 200/9-195 (West 2014). ¶6 At the time the amendments were passed, the Metropolitan Airport Authority of Rock Island County leased property to the for-profit FBO, Elliot Aviation, Inc.”
Moline Sch. Dist. No. 40 Bd. of Educ. v. Quinn, 2015 IL App (3d) 140535 (Ill. App. Ct. 2015). “" 35 ILCS 200/9-195 (West 2014). ¶6 At the time the amendments were passed, the Metropolitan Airport Authority of Rock Island County leased property to the for-profit FBO, Elliott Aviation, Inc.”
People v. Davis, 2021 IL App (1st) 191959 (Ill. App. Ct. 2021). · cites it 3× “This provision, now found at section 9-195 of the Property Tax Code (35 ILCS 200/9-195 (West 2020)) is the one under which the County has pursued Rep.”
Moline Sch. Dist. No. 40 Bd. of Educ. v. Quinn, 2015 IL App (3d) 140535 (Ill. App. Ct. 2015). “" 35 ILCS 200/9-195 (West 2014). ¶6 At the time the amendments were passed, the Metropolitan Airport Authority of Rock Island County leased property to the for-profit FBO, Elliott Aviation, Inc.”
United Airlines, Inc. v. Pappas (Ill. App. Ct. 2004). “35 ILCS 200/9-195 (West 1996). The property was subject to a general assessment by the Cook County assessor in 1994 and was scheduled for reassessment in three years.”
Metro. Airport Auth. v. Prop. Tax Appeal Bd. (Ill. App. Ct. 1999). “35 ILCS 200/9-195 (West 1996); People ex rel.”
Nw. Surburban Fellowship v. Dept. of Revenue (Ill. App. Ct. 1998). “" 35 ILCS 200/9-195 (West 1996). Section 15-55 exempts State property from taxation, but allows for taxation of State property leased to others, with such taxes to be paid by the lessee.”
— 35 ILCS 200/9-195(a) — 1 case
Millennium Park Jt. Venture, LLC v. Houlihan, 948 N.E.2d 1 (Ill. 2010). “Plaintiff entered into a "Concession Permit Agreement" with the Park District in February 2003, which allowed plaintiff to use certain portions of Millennium Park to operate a food concession service. The Property Tax Code authorizes the assessor to tax a lessee's leasehold…”
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