Building Material Sales Tax Exemption

Enterprise Zone participants have been granted an exemption of the State, City and County sales tax. Sales tax is exempted on building materials incorporated into real estate located in the Enterprise Zone. The exemption applies to building and construction materials used for remodeling, rehabilitation or new construction. To receive an application for exemption certificate, please contact the Office of Planning and Economic Development at the City of Springfield, 2177892377 X 5471, for more information on this program.

   Investment Tax Credit

The Illinois Income Tax Act, 35 ILCS 5/201, as amended, allows corporations, trusts, estates, individuals, partners and Subchapter S shareholders a 0.5 percent credit against the state income tax for investments in qualified property which is placed in service in an Enterprise Zone. This credit is in addition to the existing 0.5 percent investment tax credit allowed statewide against the corporate personal property replacement tax. The investment tax credit applies against gross income subject to Illinois income tax and to the depreciable basis of qualified property placed in service within the Enterprise Zone. It is a one-time credit given in the taxable year in which the property is placed in service. If the amount of the credit exceeds the tax liability for that year, the excess may be carried forward and applied to the tax liability of the five taxable years following the excess credit year. Contact the Illinois Department of Revenue at 217.782.3336 to see what impact this incentive might have for you.

  Utility Tax Exemption

The Public Utilities Act, 220 ILCS 5/9-222.1, as amended, and the Telecommunications Excise Tax Act, 35 ILCS 630/2(a)(5), as amended, allows a business enterprise certified by the Department of Commerce and Economic Opportunity as making an investment in an Enterprise Zone that either creates a minimum of 200 full-time equivalent jobs in Illinois or retains a minimum of 1,000 full-time jobs in Illinois, a 5 percent state tax exemption on gas, electricity and the Illinois Commerce Commission 0.1 percent administrative charge and excise taxes on the act or privilege of originating or receiving telecommunications. To see if your business qualifies, contact the Illinois Department of Commerce and Economic Opportunity at 217.524.0165.

   Manufacturing Machinery and Equipment Sales Tax Exemption

The Revenue Act 35 ILCS 120/ld-lf, as amended, allows a business enterprise that is certified by the Department of Commerce and Economic Opportunity as making a $5 million investment that either: creates a minimum of 200 full-time equivalent jobs in Illinois; or retains a minimum of 2,000 full-time jobs in Illinois; or which retains 90% of the existing jobs, a 6.25 percent state sales tax exemption on all tangible personal property which is used or consumed within an Enterprise Zone in the process of manufacturing or assembly of tangible personal property for wholesale or retail sale or lease. This exemption includes repair and replacement parts for machinery and equipment used primarily in the process of manufacturing or assembling tangible personal property for wholesale or retail sale or lease, and equipment, manufacturing fuels, material and supplies for the maintenance, repair or operation of manufacturing or assembling machinery or equipment. Contact OPED at: info.OPED@springfield.il.us or call 217.789.2377 for more information on this program.

   Enterprise Zone Boundary Amendments

Additions to the Springfield/Sangamon County Enterprise Zone may be considered undby email ater special circumstances. Boundaries can be expanded for qualified projects. This process is subject to the approval the State of Illinois Department of Commerce and Economic Opportunity, Sangamon County Board, and the Springfield City Council. Boundary amendment requests may be subject to an application fee. Contact OPED at: info.OPED@springfield.il.us or call 217.789.2377 for more information on this process.

New construction or rehabilitation of property located in the Enterprise Zone may qualify for a property tax abatement of the City or Sangamon County portion of real estate taxes based on the increase in assessed value of property due to the improvements. No abatement shall include both Sangamon County and City of Springfield real property taxes. Property located in a Tax Increment Finance District is not eligible for property tax abatement according to state guidelines. In order to receive property tax abatements, an application must be submitted to the Office of Planning and Economic Development. To receive an application for exemption certificate, Contact OPED at: info.OPED@springfield.il.us or call 217.789.2377 for more information on this program.

Targeted Inducement Criteria

Qualified projects result in over $25,000 in increased assessed value and fall within one of the following categories:
 

1. Industrial or Manufacturing Projects and other businesses that fall within the North American Industry Classifications Sector 31-33 and all sub-sectors therein.
2. Large Business Projects, defined as projects with new capital investments of $10 million or more/and or create 100 or more new full-time jobs.
3. Healthcare with the specific NAICS sub-sectors of Outpatient Care Centers, Medical and Diagnostic Laboratories, and General Medical and Surgical Hospitals.
4. Professional, Scientific, and Technical Services including computer programming services, computer system design services, and research and development in the physical, engineering and life sciences.

Projects that qualify for Targeted Inducement will receive 100% abatement of the City of Springfield’s portion of taxes for 5 years.

General Inducement Criteria

Qualifying projects will result in over $25,000 in increased assessed value and fall within one of the following categories:
 

1. Commercial and Industrial projects that do not meet the Targeted Inducement Criteria
2. Single Family and Multi-Family residential projects

Projects that qualify for General Inducement will receive an abatement of the City of Springfield’s portion of taxes as follows: 100% the first year, 75% the second year, and 50% the third and final year.

Area Impact Inducement Criteria

Qualified projects result in over $25,000 in increased assessed value and are located within a Community Development Block Grant Treatment Area and Enterprise Zone. Projects that qualify for Area Impact Inducement will receive 100% abatement of the City of Springfield’s portion of taxes for 5 years.

Sangamon County Property Tax Abatement

Qualified projects are located in unincorporated Sangamon County, result in over $100,000 in increased assessed value, and fall within one of the following categories:

1. Industrial Companies: companies where manufacturing or assembling of goods take place
2. Logistics Companies: warehousing and distribution businesses that are engaged in the storage and packing of goods, and the transferring of products
3. Agribusiness Companies: companies that manufacture and distribute farm supplies and equipment, process, store and distribute farm commodities, and process, produce and store food products for consumption
4. Retail/Commercial Companies: companies in the business of selling products or services in the following categories: stores that sell products, including fuel to the general public and to wholesale customers, restaurants, hotels/motels, and related concerns
5. Mining Companies: businesses that remove coal and other natural substances from the earth, or businesses that convert mining products into usable materials
6. Commercial Recycling Companies: businesses that use a large scale industrial process to convert waste into reusable materials or make waste suitable for re-use

In no event shall any abatement of taxes on any parcel exceed the amount attributable to the construction of the improvements, renovation, rehabilitation, or existing improvements on such parcel.

These projects will receive an abatement from the County’s portion of taxes for ten years or until the expiration/termination of the Springfield-Sangamon County Enterprise Zone. The following abatement schedule shall be followed:

1. 100% of taxes will be levied in the first five years of abatement
2. 50% of taxes will be levied in the second five years of abatement