Real Estate Program: Payments in Lieu of Tax (PILT)

The Department of Natural Resources makes an annual payment in lieu of real estate taxes to replace property taxes that would have been paid if the property had remained in private ownership. The payment is made to the local taxing authority where the property is located.

Because DNR pays a fair share of aid on all lands purchased since January 1, 1992, there is no loss of property tax revenue in the taxation district due to DNR ownership. In fact, because the purchase price is often higher than equalized assessed value, the DNR payment is often greater.

How is PILT calculated?	Wis. Stats. 70.114 Payments
How is PILT distributed?	How Does PILT Work?
Wis. Stats. 70.113 Payments	Reports

How is PILT calculated?

The dollar amount the DNR sends to each municipality is dependent upon the number of acres of land the DNR owns and the time of acquisition. The following WI State Statutes apply to these acquisition dates:

Statute 70.113
- Prior to July 1, 1969
- Between July 1, 1969 and December 31, 1991
Statute 70.114 - January 1, 1992 to present

How is PILT distributed?

Under Statute 70.113, a payment is made directly to a municipality (City, Town, or Village) and retained. Under Statute 70.114, a payment is sent to a municipality, and then these funds are to be distributed to its corresponding taxing jurisdiction, such as a School District, Vocational School, County, State, or other Special Districts.

[ Back to Top ]

Wis. Stats. 70.113 Payments

Two different types of payment are made under Section 70.113:

On land acquired by the Department before July 1, 1969, the Department pays municipalities 88 cents per acre for lands owned in fee title and for lands leased from the federal government.
On land acquired by the Department after July 1, 1969 and prior to January 1, 1992, the payment is based on the local assessment of the following January 1, multiplied by the county, local, and school tax rates for the year. Therefore, the first year payment is equal to the full property tax that would have been paid had the property remained on the tax roll. The Statute directs that the amount be decreased at the rate of 10 percent per year after the initial payment. In the tenth year, and every year thereafter, a payment of 10 percent of the first year's payment will be made but will never be less than 50 cents per acre.

Wis. Stats. 70.114 Payments

The Department of Natural Resources pays aids-in-lieu-of-taxes equal to property taxes that would have been paid had the land remained in private ownership. The effective date of this program was January 1, 1992. The first payment was made in January 1994 for the 1993 tax year. According to State Statute 70.11 (1), property acquired by DNR comes off the tax roll. In lieu of the loss of tax base, each taxing jurisdiction receives an aid payment equivalent to property taxes.

The only difference between the new DNR aid-in-lieu-of-tax program and private land relates to assessed value. To avoid the need for local assessors to continually assess DNR property and for the DNR to review and possibly appeal assessments, the initial assessed value is set at the DNR purchase price of the property, which is based on appraised fair market value. Subsequently, this value is adjusted to reflect the change in the assessed value of land in the taxation district. The first year payment is actually based on an adjusted purchase price. All other aspects of the way DNR pays aid-in-lieu-of-tax under this new program are the same as those for a local taxpayer.

[ Back to Top ]

How Does PILT Work?

The program works like this:

In the year of purchase (e.g., 1997), regular property taxes are paid as determined in the closing transaction. The seller pays a prorated share, and DNR pays the balance.
For the following year (i.e., 1998), the assessed value of the property is the purchase price as determined by certified appraisals. In cases where the acquisition is at other than market value, such as donation, the assessed fair market value for the year preceding the purchase is used.
The Department adjusts the purchase price to reflect the change in the assessed value of all land in the taxation district. The adjustment rate is supplied by the State Department of Revenue. The adjustment factor is used to calculate a current "assessed value." In addition, the adjusted "assessed value" is equalized. The equalization rate is provided by the Department of Revenue. The "equalized assessed value" is then used to calculate the aid payment.
In December (i.e., 1998), the Department gathers the general property tax rates for the current year (i.e., 1998) for all taxing jurisdictions from the taxation district clerk.
On or before January 31 of the next year (i.e., 1999), DNR calculates and pays the taxation district treasurer the aid-in-lieu-of-tax payment. The amount calculated by multiplying the equalized, adjusted "assessed value" by the appropriate tax rates.
On or before February 15 (i.e., 1999), the taxation district treasurer pays each taxing jurisdiction (town, village, or city; school; VTAE; County; State of Wis.; and special districts) its appropriate share of the aid payment.

Under two previous aid-in-lieu-of-tax programs (70.113 ss), land acquired by DNR went off the tax roll, and DNR made an aid-in-lieu-of-tax payment to only the town, village, or city taxation district at discounted rates. (The school, VTAE, and county jurisdictions did not receive an aid payment). However, the loss of tax base triggered increases in other state aids to offset possible tax losses. While these aid programs prevented adverse tax impacts, it was difficult for local taxpayers to believe the system worked. Consequently, many taxpayers thought DNR acquisitions made their property taxes higher. The new program treats DNR just like tax-paying property owners.