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Since 1977, the State of Illinois has used a use-value method of assessing farmland for property taxes. The method establishes farmland value by determining a five year average of net income from the land that is capitalized using a five year average interest rate. Other real estate in Illinois follows a different procedure for assessment. For example, residential property is assessed at one-third of its market value. The differences among the methods of assessment for farmland and other types of real estate, along with recent market increases in farmland values and a strong agriculture economy, have led some to question the current method of farmland assessment. The objective of this thesis is to determine the financial impact to farmers resulting from changing from the current use-value assessment of farmland to market-value assessment. This is accomplished with two sub-objectives: determine the potential change in farmland values that could occur and to determine the impact on net farm income that could occur if property tax policy was changed to market-value assessment. To accomplish the first sub-objective, a model was developed to estimate farmlan