Payments in lieu of tax (PILT)

What is PILT?

Payment in Lieu of Tax (PILT) was created to compensate municipalities and other local taxing jurisdictions since land owned by the Wisconsin Department of Natural Resources (DNR) is exempt from property tax. The DNR makes an annual payment under both sections of state statute to replace property taxes that would have been paid if the property had remained in private ownership. State statute separates payments into two sections based on when the land was acquired. Wisconsin State Statute Section 70.113 (Wis. Stats. 70.113) pertains to lands acquired before January 1, 1992, while Wisconsin State Statute Section 70.114 (Wis. Stats. 70.114) pertains to lands acquired on or after January 1, 1992. The payment amounts per acre, formulas to determine payment amounts, and process for making payments are all defined in state statute. Additionally, the equalization ratios are provided by DOR which originates from local property assessors. Therefore, it is important to note that the DNR is authorized to disperse the funds but does not determine the amounts based on property values and formulas.

View of the Mississippi at Perrot State Park. Lands within Perrot State Park are mostly under PILT 113 with the exception of 26 acres that were acquired after 1992. 

Frequently Asked Questions Regarding PILT 114

Q: I am not receiving letters regarding PILT from the DNR or they are being sent to a previous clerk/treasurer. How do I fix this so it goes to the correct person?

A: Please use this link (https://www.revenue.wi.gov/Pages/FAQS/pcs-change.aspx#change3) to have an elected official's mailing address updated. The only information that is kept in DNR databases is email addresses.

Q: Do I need to distribute PILT payments to other taxing jurisdictions?

A: Municipalities DO NOT need to distribute Wis. Stats. 70.113 payments to other taxing jurisdictions. Under Wis. Stats. 70.114, municipalities are required to distribute a certain amount of the total payment to the other taxing jurisdictions (state, county, schools, tech/vocational schools and or other special districts) on or before Feb. 15. The distribution amount will be provided via a letter which will arrive around the time of the total payment.

Q: When will I receive my PILT payments?

A: Wis. Stats. 70.113 is distributed around April 20 of each year with Wis. Stats. 70.114 being distributed anywhere from early January to Jan. 31 provided mill rates have been submitted.

Q: Can I get an estimate on this year's or next year's PILT payment to help me determine my municipalities budget?

A: There is no efficient way to project or estimate PILT 114 payments without mill rates and going through the entire payment process. I advise projecting a PILT payment range of 10% higher or lower based on the most recent PILT payment. However, for PILT 113 you can expect the payment amount to stay the same year over year barring unforeseen changes.

Q: How is the purchase price or equalized value determined if the land was donated?

A: For donated land, the DNR will use the estimated fair market value, as shown on the tax bill, in place of the purchase price. This allows for a fair value determined by the current market to make sure PILT payments are not unfairly calculated.

Q: How is PILT affected if the land acquired was exempt from property tax, enrolled in the Forest Cropland program or the Managed Forest program at the land of purchase?

A: The fair market value is also used or determining the purchase price.

Q: How is property tax paid the year the land was acquired?

A: This process works identical to how most real estate transactions occur. In the year of purchase, the property taxes levied against that parcel for that year are prorated at the time the property is transferred to the department. The landowner pays the taxes for the portion of the year they owned the land and the department pays the taxes for the portion of the year the department owned the property.

Q: How is Wis. Stats. 70.114 Calculated?

A: Calculated Wis. Stats. 70.114 has a few steps and is broken down below:

1. For the first year and each subsequent year, the department takes either the purchase price or the equalized value (depending on the above criteria) to reflect the change in the assessed value of all land in the taxation district for that year. The State Department of Revenue (DOR) supplies this data which is referred to as an adjustment rate or an aggregate ratio. The adjustment rate is then used to calculate a current "estimated value" which is then also equalized by using the equalization ratio, provided by DOR, to get the final "equalized estimated value" for each parcel that the DNR owns.
2. The next step is where we need the help of the municipalities. Each December, the department gathers the general property tax rates or "mill rates" for the current tax year for all taxing jurisdictions in a taxation district (municipalities) in which the DNR owns the land. Municipalities will receive a letter in late November which contains the mill rate worksheet along with instructions on what is needed and how to fill out the mill rates online. Once the mill rates are received by the DNR, they are added together to get the "aggregate net general tax rate" for each taxing jurisdiction.
   1. "aggregate net general tax rate" is simply (mill rate) – (mill rate/sum of all mill rates in muni*school tax credit
3. The "aggregate net general tax rate" of each taxing jurisdiction is then multiplied by the "equalized estimated value" of a parcel to obtain the PILT payment amount. This process is then repeated for each parcel of land that the DNR owns.
4. These payments must then be distributed to the treasurer of each taxing district on or before January 31st each year. However, payments cannot be calculated and therefore distributed until the mill rates are received.