Business & Economic Incentive Programs
City of Kewanee Enterprise Zone
Administering Agency: City of Kewanee
Agency Contact, City of Kewanee Enterprise Zone Administrator
Gary Bradley
(309) 852-2611, ext. 232
gbradley@cityofkewanee.net
Type of Benefits: Financing and redevelopment incentives
Description of Benefits/Allowable Uses of Benefits/Eligibility:
Investment Tax Credit – the investment tax credit allows a .5% credit against the state income tax for investments in qualified property which is placed in service in an enterprise zone.
Sales Tax Exemption – the cost of building materials that will be incorporated into real estate as part of a building project may be deducted from the sale receipts when calculating the tax imposed for these materials. To receive these deductions, the purchaser must ask the retailer for cooperation in this incentive and have a Certificate of Eligibility for Sales Tax Exemption, which is not difficult to receive but one must file an application with the Enterprise Zone Administrator.
If project triggers building permits, and the company purchases materials with the State of Illinois, the 6.25% sales tax that would have been assessed can be waived.
EZ Machinery and Equipment Sales Tax Exemption – a company in an enterprise zone may be able to receive a 6.26% sales tax exemption on all tangible property which is used or consumed within an enterprise zone in the process of manufacturing.
To be eligible for this incentive, the company must create 200 full-time jobs in Illinois; or retain a minimum of 2,000 full-time jobs, or retain 90% of existing jobs when moving into the enterprise zone. The items and materials may be purchased anywhere in Illinois.
Utility Tax Exemption – a company in an enterprise zone may be eligible for a 5% state tax exemption on gas, electricity, the Illinois Commerce Commission .1% administrative charge, and the excise taxes on gas, electricity, and water.
To be eligible for these benefits, the company must meet one of three conditions: the business must make an investment of at least $5,000,000 into the enterprise zone and create a minimum of 200 full-time jobs; or, make an investment of $175,000,000 into the zone and create a minimum of 150 full-time jobs; or, make an investment of $20,000,000 and retain at least 1,000 full-time jobs when moving into the zone.
An eligible investment may be purchasing a building, the improvement/renovation of a building or investments in efficiency, capacity, product quality or competitive position.
Job Tax Credits – a tax credit of $500 per qualified employee may be given to an enterprise zone company that hires individuals who are certified as economically disadvantaged or as dislocated workers. These workers must be found through the local administrative office of the Workforce Investment Act.
Property Tax Incentives – A company in an enterprise zone may have the increase in property taxes due to new improvements or renovations abated. This is useful because every time a property is improved it is reassessed, and therefore the taxes increase.
If improvements require building permits, permit fees can be waived and the increase in property taxes can be abated for a period of 5years. In year six, the normal property tax schedule resumes.
Income Tax Deduction for Financial Institutions - financial institutions in Illinois are eligible for special deductions on their Illinois corporate income tax return. Such institutions may deduct from their taxable income an amount equal to the interest received from a loan for development in an enterprise zone. This is limited to the interest earned on loans or portions of loans secured by property which is in an enterprise zone.
Dividend Deductions - Taxpayers may deduct from their taxable income an amount equal to those dividends which were paid to them by a corporation which conducts substantially all of its operations in an enterprise zone or zones.
Corporate Contribution Deductions - Corporations may make donations to designated zone organizations for projects approved by the Illinois Department of Commerce and Economic Opportunity (DCEO), and claim an income tax deduction at double the value of their contribution as long as it is approved by the DCEO.
Illinois Economic Development for a Growing Economy (EDGE) Tax Credit
Administering Agency: Illinois Department of Commerce & Economic Opportunity (IL DCEO)
Type of benefits: Tax Credit
Description of Benefits:
The EDGE program is designed to offer a special tax incentive to encourage companies to locate or expand operations in Illinois where there is active consideration of a competing location in another State. Tax credits are calculated from the personal income tax collected on salaries paid to employees in the new jobs created, which may be taken as a non-refundable credit against corporate income taxes over a period not to exceed 10 taxable years.
Allowable Uses of Benefits:
The project must be an expansion of an existing operation or a new location.
Eligibility:
The development project must add to the export potential of Illinois; for example manufacturing or services exported outside of the state would be acceptable; but not retail trade or personal services.
Each project must commit to make a capital investment in the state of at least $5 million and must create a minimum of 25 new jobs (excluding recalls, transfers, etc.); or companies with less than 100 employees must make a capital investment of at least $1 million and must create a minimum of 5 new jobs, or the project must meet the investment and job creation, and/or retention requirements as set forth by the Illinois Department of Commerce and Economic Opportunity (DCEO).
For more information: Economic Development For a Growing Economy Tax Credit Program (EDGE)
Illinois High Impact Business (HIB) Program
Administering Agency: Illinois Department of Commerce & Economic Opportunity (IL DCEO)
Type of Benefits: Tax Credit
Description of Benefits:
The HIB program is designed to encourage large-scale economic development activities, by providing tax incentives (similar to those offered within an enterprise zone) to companies that propose to make a substantial capital investment in operations and will create or retain an above average number of jobs. Businesses may qualify for investment tax credits, a state sales tax exemption on building materials, exemption from state sales tax on utilities, 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.
Allowable Use of Benefits:
Tax exemptions and tax credits for major economic development projects.
Eligibility:
Designation as a High Impact Business requires the following: a minimum of $12 million investment causing the creation of 500 full-time jobs or an investment of $30 million causing the retention of 1,500 full-time jobs.
The program has been expanded to include the following:
Coal/Energy High Impact Business - qualifying electric generating facilities, production operations at a new coal mine, or a new or upgraded transmission facility that supports the creation of 150 coal mining jobs or a newly constructed gasification facility. Companies with the Coal/Energy High Impact Business designation may qualify for sales tax exemptions on building materials, an investment tax credit, an exemption from state gas tax on utilities and excise tax on electricity.
Wind Energy/High Impact Business – designation as a Wind Energy/HIB is contingent on a business constructing a new electric generation facility or expanding an existing wind power facility. Companies with the Wind Energy/High Impact Business designation are only eligible for the sales tax exemption on building materials.
Note: the investment must occur in a designated location in Illinois outside of an existing Enterprise Zone. The City of Kewanee does have an Enterprise Zone, so please contact KEDC to determine if your location is outside of the Enterprise Zone.
For more information: High Impact Business (HIB)
Illinois Large Business Development (LBDP) Program
Administering Agency: Illinois Department of Commerce & Economic Opportunity (IL DCEO)
Type of Benefits: Grant or Loan
Description of Benefits:
The LBDP program is designed to provide grants or financing to businesses undertaking a major expansion or relocation project that will result in substantial private investment and the creation and/or retention of a large number of Illinois jobs. Grant eligibility or loan amounts are determined by the amount of investment and job creation or retention involved.
Allowable Use of Benefits:
Funds available through the program may be used by large businesses for bondable business activities, including financing the purchase of land or buildings, building construction or renovation, and certain types of machinery and equipment.
Eligibility:
Companies with 500 or more employees undertaking major expansion or relocation projects with significant capital investment and 300 new or retained full-time jobs. Retail service companies and businesses with less than 500 employees are not eligible for this program.
Loan Term: 10 years.
Loan Rate: Fixed, low or no interest rate.
For more information: Large Business Development Program (LBDP)
Manufacturers Purchase Credit
Administering Agency: Illinois Department of Revenue
Type of Benefits: Tax Credit
Description of Benefits:
Qualified manufacturers may earn a tax credit equal to half of the 6.25% state tax by purchasing manufacturing or graphic arts machinery or equipment that qualifies for existing sales/use tax exemption.
Allowable Use of Benefits:
Credits may be used to pay state sales tax or use tax on future purchase of qualifying production-related tangible personal property.
Eligibility:
Companies in manufacturing and graphic arts industries. Purchased equipment must qualify for existing sales/use tax exemption, including items for research and development and purchased equipment to be leased out to other companies. All used MPC expires on the last day of the second calendar years following the year in which the original tax exempt purchase was made.
For more information: Manufacturer's Purchase Credit (MPC)