Enterprise Zones
An Enterprise Zone is a designated area, made possible through the Illinois Enterprise Zone Act, designed to stimulate economic growth and neighborhood revitalization in economically depressed areas through state and local tax incentives, regulatory relief, and improved governmental services. Businesses located or expanding in an Illinois enterprise zone may be eligible for state and local tax incentives. Moran Economic Development has successfully established or amended over 30 Enterprise Zones in the state of Illinois. Our experienced team can also assist with the administration of your Zone, help with reporting criteria and sales tax exemption certificates, and work with local businesses on zone benefits.
What State and Local Incentives and Exemptions are Available?
State Incentives and Exemptions
- Exemption on retailers’ occupation tax paid on building materials.
- Expanded state sales tax exemptions on purchases of personal property used or consumed in the manufacturing process or in the operation of a pollution control facility.
- An exemption on the state utility tax for electricity and natural gas.
- An exemption on the Illinois Commerce Commission’s administrative charge and telecommunication excise tax.
- Enterprise Zone Construction Jobs Credits: Allows eligible project owners to deduct received tax credits from their taxable income.
Exemptions are available for companies that make minimum statutory investments that either create or retain a certain number of jobs. These exemptions require a business to make application to, and be certified by, the Illinois Department of Commerce.
Local Incentives and Exemptions
In addition to state incentives, each zone offers local incentives to enhance business development projects. Each zone has a designated local zone administrator responsible for compliance and is available to answer questions. To receive a Certificate of Eligibility for Sales Tax Exemption, you must contact the local zone administrator of the zone into which purchased building materials will be incorporated.
Property Tax Abatement
In addition, some Enterprise Zones offer the local incentive of a property tax abatement for qualifying projects. The abatement process, percentage of total abatement, and years of abatement can vary by zone. We can assist you in navigating this process, whether it be local units of government implementing property tax abatement or private developers needing abatement to facilitate specific projects.
What are the conditions of the property tax abatement?
- The designating ordinances will identify eligible projects and can vary by development type (residential, commercial, industrial), project type (new construction or rehab/remodel), and/or investment (i.e. minimum qualified investment of $5,000).
- The abatement is not applicable to any property located within a Tax Increment Financing (TIF) Redevelopment Project Area.
- The abatement is applicable to new improvements only and cannot exceed the amount attributable to the construction of the improvements and renovation of the existing improvements on the parcel of property.
- The abatement will apply to a percentage of the taxes on the improvements for a period of years set by ordinance of the managing entities of the Zone.
Can an Enterprise Zone be Amended?
Yes, Enterprise Zones can be amended to make changes including, but not limited to, the following:
Adding territory.
Deleting territory.
Adding a unit of government.
Modifying local incentives.
Amendments to existing Enterprise Zones are common, and Moran Economic Development has assisted numerous communities in the amendment process. Since the original establishment of these Enterprise Zone areas municipalities often find that boundary amendments are necessary to accommodate future development areas not currently located in the existing zone, to add property to include additional units of government, to modify the local incentives available (to establish property tax abatement, modify eligible projects for abatement, change the property tax abatement schedule, etc.), and other similar changes to the zone area and structure.
Enterprise Zone Application Experience
The following is an example of an Enterprise Zone project we have worked on in the past:
Contact Us
If you’re looking to capitalize on the Illinois Enterprise Zone program, Moran Economic Development can help you navigate the complexities. Contact us to learn more today.