The Illinois Enterprise Zone Act, signed into law in 1982, builds a coalition between state and local government to stimulate economic growth at the local level. This is accomplished through state and local tax incentives, regulatory relief and improved government services to companies locating in enterprise zones. The Jacksonville/Morgan County Enterprise Zone provides property tax abatement on an eight-year sliding scale, exempts sales tax on building material and offers several income tax incentives.
Property Tax Abatement
The Jacksonville/Morgan County Enterprise Zone program provides for abatement of real estate taxes resulting from increased assessed valuation on industrial or commercial construction projects associated with expansion, rehabilitation, or new construction according to the following schedule:
Building Materials Sales Tax Exemption
Construction materials purchased for use on building projects within the zone will be exempted from the full 6.25% Illinois sales tax. Construction projects must be approved in advance and must receive a Certificate of Eligibility for Sales Tax Exemption from the Zone Administrator. This form must be provided to the retailer before the purchase of materials is complete.
Job Tax Credit
A $500 State of Illinois income tax credit for each job created in a zone project and in which five (5) or more eligible workers are hired.
Investment Tax Credit
A .5% tax credit is allowed on new investments in qualified property in the zone. This is in addition to the regular .5% tax credit available throughout the state.
Income Tax Deductions
Dividend Income – Individuals, corporations, trusts and partnerships are not taxed on dividend income derived from corporations doing substantially all their business in a zone.
Interest Income – Financial institutions are not taxed on interest income received from development loans within the zone.
In-Kind Contribution – Businesses may deduct from taxable income double the value of a cash in-kind contribution to an approved project of a designated zone organization.
Other State Tax Incentives
If your business creates 200 new full-time jobs and invests $5 million, or retains 2,000 jobs and invests $40 million, you may be eligible for additional state tax incentives.
To qualify for enterprise zone incentives, the following criteria must be met:
a) The property where any rehabilitations, expansions, or new construction is taking place must be located within the legal boundaries of the Jacksonville/Morgan County Enterprise Zone. The Jacksonville Regional EDC can verify the boundaries.
b) Projects within the Jacksonville/Morgan County Enterprise Zone must be of the nature which would require a building permit. The completed and approved building permit (City of Jacksonville) or certificate of appropriateness (Morgan County) is the key to obtaining any tax benefits, and must be acquired before any program incentives are granted.
The Jacksonville/Morgan County Enterprise Zone seeks to:
- attract new industry
- expand existing business; and
- promote neighborhood revitalization and development.
To accomplish these goals, the zone provides free market initiatives and financial incentives, including tax credits, exemptions and deductions, and a commitment to encourage and expedite community growth in any way possible.
|Project Savings Property Tax Abatement: $5,333
Based on an EAV of $83,333
1/3 of building market value,
tax rate assumed at $7.00 per
|Investment Tax Credit: $1,750
1/2% of $350,000
|Sales Tax Abatement: $6,250
Savings of 6.25% on
materials cost, estimated
|Jobs Tax Credit: $5,000
$500 per job
|EZ Investment Tax Credit: $1,750
1/2% of $350,000
|First Year Savings
$20,493Total Savings, 7 Years
For additional information or an application, contact:
Jacksonville Regional Economic Development Corporation
221 E. State Street
Jacksonville, Illinois 62650