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
- Local property tax abatement
The Springfield & Sangamon County Enterprise Zone Program is administered by the City of Springfield.
Tax Increment Financing (TIF)
There are multiple Tax Increment Finance Districts (TIFs) in Springfield and Sangamon County. TIFs provide a tool for communities to financially assist in the development or redevelopment of a designated area.
The most commonly utilized state-administered incentive programs are:
Economic Development for a Growing Economy Tax Credit Program (EDGE)
Illinois’ EDGE program provides annual corporate tax credits to qualifying businesses which 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:
Data Center Investment Tax Exemptions and Credits
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.
High Impact Business Program (HIB)
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.
Illinois Apprenticeship Education Expense Tax Credit Program
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 under-served area or (2) the employer's principal place of business is located in an under-served area.
Illinois Angel Investment Credit Program
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 (QNBVs) 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.
Additional incentive programs are offered by the State of Illinois however, those programs have much more specific requirements and qualifications. For more information, please contact Josh Collins.
New Market Tax Credit (NMTC)
Springfield has several census tracks that qualify for the federal New Markets Tax Credit Program (NMTC). The NMTC Program attracts investment capital to qualified census tracks by permitting individual and corporate investors to receive a tax credit against their Federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years (five percent for each of the first three years, and six percent for each of the remaining four years). Sites and building located with a NMTC qualified census tracks are identified within the sites and building material.
The Opportunity Zones program encourages long-term investment and job creation in low-income areas of the state, by allowing investors to re-invest unrealized capital gains within one of the five designated census tracts within Springfield & Sangamon County.