Illinois Incentives Update

 
True_Alert_Header_Issue_2015-15
© 

On November 10, 2015, Illinois Governor Bruce Rauner’s Administration announced that, effective immediately, the Department of Commerce and Economic Opportunity (“DCEO”) will resume approval of EDGE Tax Credits and Film Tax Credits, both of which were suspended for new projects at the beginning of the State’s fiscal year. Although the DCEO will be re-instituting EDGE and Film Tax Credit approvals, actual tax credits for newly approved projects will not be certified until a fiscal year 2016 budget is enacted.

EDGE Tax Credit

Policy Changes

In order to ensure a more fiscally-responsible approach to Illinois incentives, the Governor instituted various policy changes to the EDGE Tax Credit program. Five primary policy changes include:

  1. The DCEO will no longer support “Special EDGE” agreements requiring legislative approval which in the past have only been available to companies hiring lobbyists;
  2. The DCEO will no longer provide EDGE tax credits for job retention projects;
  3. When counting for new job creation, the DCEO will now require each company to set a statewide baseline for all of its employees.  This policy helps the DCEO more accurately count net incremental increase of all jobs created within the company on a statewide level;
  4. The DCEO will no longer allow multiple EDGE agreements within the same location;
  5. All of these policy changes are focused on trying to market the State’s assets as opposed to leading the state’s efforts by using incentives;

Incentives Process
The DCEO has also made additional changes internally to help streamline the incentives process.

  1. Outreach & Negotiation – At this stage, the DCEO will focus on engaging with companies to determine project parameters and requested assistance.
  2. EDGE Offer – The DCEO will issue an incentives offer letter to the company if providing an incentive is deemed to be in the best interest of the State.  One important point to note is that the policy change now allows for the company to begin creating jobs and making investments that will count toward meeting its EDGE Agreement requirements.  In prior administrations, job creation and capital investments could not be made until after the EDGE agreement was executed.
  3. Executed Agreement – Binding EDGE agreement executed once company elects to move forward with the project, thereby confirming EDGE eligibility.
  4. Annual ReportingCompany is required to send a report and third-party audit each year the company qualifies to earn the credit (assuming the company meets Agreement requirements).
    1. This is another policy change for the EDGE program; in prior administrations, the first year of the tax credit (the Initial Issuance) was the only year that the company was required to file the audit along with the annual report.
  5. Certificate of Verification – The DCEO reviews company’s report and issues a certification to the company if report deemed sufficient.
    1. NOTE:  Credit certificates for new EDGE Agreements negotiated in FY 2016 will continue to stay suspended until a budget is passed for FY 2016.
  6. Claiming Credit – Company provides certification to Illinois Department of Revenue to claim credit against its state income taxes.

Our Expertise
True Partners Consulting’s Credits and Incentives Practice can assist your business with all aspects of incentives negotiations, including Illinois EDGE annual compliance. Our team of knowledgeable professionals provides advice and performs services to assist in all aspects of credits and incentives negotiation and compliance. If you have any questions or need help in maximizing your incentives potential, please contact Minah Hall at Minah.Hall@TPCtax.com or Natalie Matwijiszyn at Natalie.Matwijiszyn@TPCtax.com.  

Download this article.

Greg Majors
Director of Business Development South/Southwest
813.434.4021
Greg.Majors@TPCtax.com

Kristin Mauer
Director of Business Development Northwest
408.625.5069
Kristin.Mauer@TPCtax.com
 

John Shipley
Director of Business Development Northeast
646.356.7214
John.Shipley@TPCtax.com

 

« Back

 

Comments

 

©2017 True Partners Consulting LLC. All Rights Reserved
close (X)