Incentives and Tax Credits
Local and regional tax incentives provide financial advantages that stimulate business activity, attract new companies, and retain existing ones. By reducing the tax burden on businesses, local and state governments aim to create a favorable environment for innovation and prosperity. These incentives and tax credits are tailored to the specific needs of our area, taking into account the unique economic landscape.
Illinois’ EDGE program provides annual corporate tax credits to qualifying businesses that support job creation, capital investment and improve the standard of living for all Illinois residents. Initial qualification criteria require certain job creation and project investment requirements.
The data centers investment program provides owners and operators with exemptions from a variety of state and local taxes for qualifying Illinois data centers. The program also provides data center owners and operators with a tax credit of 20% of wages paid for construction workers for projects located in under-served areas.
The program supports large-scale economic development activities by providing tax incentives (similar to Enterprise Zones) to companies that make substantial capital investments in operations and create or retain an above-average number of jobs. Businesses may qualify for: investment tax credits, a state sales tax exemption on building materials and/or utilities, a state sales tax exemption on purchases of personal property used or consumed in the manufacturing process, or in the operation of a pollution control facility.
Effective January 1, 2020, employers are allowed a tax credit for qualified educational expenses associated with qualifying apprentices. Employers may receive a credit of up to $3,500 per apprentice against the taxes imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, and an additional credit of up to $1,500 for each apprentice if (1) the apprentice resides in an underserved area or (2) the employer’s principal place of business is located in an underserved area.
The Illinois Angel Investment Tax Credit Program encourages investment in innovative, early-stage companies to help obtain the working capital needed to further the growth of their company in Illinois. Investors in companies that are certified as Qualified New Business Ventures (QNBFs) can receive a state tax credit equal to 25% of their investment (up to $2 million). A total of $10 million in Angel Investment tax credits are allocated in CY 2019, 2020, and 2021. Credits will be released by quarter, on a first-come-first-served basis. Once tax incentive credits for a particular quarter are exhausted, no further credits can be allocated until the subsequent quarter.
The Reimagining Energy and Vehicles in Illinois Act (REV Illinois Act) is a highly competitive incentives program to bolster Illinois manufacturing in the clean jobs economy, created to attract companies all along the supply chain in the electric vehicle and renewables sectors. In addition to utilizing Illinois’ skilled workforce to make the jobs of the future a reality in Illinois today, the program supports our state’s bold climate change agenda to achieve 100% clean energy by 2050, including putting one million EVs on the road by 2030.
Illinois law allows units of local governments to designate areas within their jurisdiction as Tax Increment Financing (TIF) districts. These districts dedicate sales tax revenues and additional property tax revenues generated within the TIF for improvements within the district to encourage new economic development and job creation. Funds may be used for costs associated with the development or redevelopment of property within the TIF, allowing blighted, declining and underperforming areas to again become viable, and allowing these areas to compete with vacant land at the edge of urban areas.
The Illinois Enterprise Zone Program offers state and local tax incentives, regulatory relief and improved governmental services. Businesses located or expanding in an Illinois enterprise zone may be eligible for the following incentives: an exemption on the retailers’ occupation tax paid on building materials, an investment tax credit of .5 percent of qualified property against state income tax, and local property tax abatement.