True Alert: Illinois Enterprise Zone Update

 
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On May 26, 2016 the Illinois Department of Commerce and Economic Opportunity (“DCEO”) issued guidance outlining its current plans regarding expiring Illinois Enterprise Zone Certificates of Exemption affecting a number of Illinois businesses.

Generally, the Illinois Enterprise Zone program allows for a specific geographic area (designated by the State of Illinois DCEO and local governments) to receive benefits intended to stimulate economic activity and revitalization in those communities.  Some of the automatic benefits include investment tax credits and sales tax exemptions of building materials.  Additional benefits may be available to companies meeting certain capital investment and job creation (or job retention) criteria.  Upon successful application and approval, the DCEO will issue a Certificate of Exemption (for five years) for the supplementary benefits of a utility and/or expanded sales tax exemption.

For those companies qualifying for the additional DCEO Certificate of Exemption, the DCEO recently provided additional guidance as follows:

  • For exemption certificates that were effective for less than five years because the underlying zone was set to expire:
    • The Certificate of Exemption will be automatically renewed for the remaining five-year balance assuming the location successfully re-applied for enterprise zone designation.
      • For example, a Certificate of Exemption initially issued for a 40-month period will receive an automatic 20-month extension under the new guidance if the Enterprise Zone was re-authorized.
  • The DCEO will be reviewing and issuing extension certificates to all applicable companies in the near future.
  • Stakeholders receiving extension certificates must distribute copies to their respective vendors in order to continue receiving the exemption through the extension period.
  • Note: This guidance is only for those Enterprise Zones that were re-authorized as part of the recent reform process. If an Enterprise Zone was not re-authorized, then the exemption certificate expires on the date referenced in the certificate.
  • For exemption certificates that were effective for the full five years:
    • The stakeholder may renew the exemption certificate through the standard renewal process which includes submitting an exemption renewal application, if the underlying zone was re-authorized.

A list of zone termination dates can be found on the DCEO website: http://www.illinois.gov/dceo/ExpandRelocate/Incentives/taxassistance/Pages/EnterpriseZone.aspx

Download this Alert (PDF)

True Partners Consulting’s Credits and Incentives Practice can assist your business with all aspects of incentives negotiations, including Illinois Enterprise Zone exemption certificate renewal applications. 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

 

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