Major State Programs
All Illinois economic incentive programs can be found here. Below is a summary of some of the more frequently used programs.
Economic Development for a Growing Economy Tax Credit Program (EDGE)
Illinois’ EDGE program provides annual corporate tax credits to qualifying businesses, supporting job creation and capital investment, and improving the standard of living for all Illinois residents. If the company and its parent have fewer than 100 full-time employees worldwide, EDGE would require you to create new jobs equal to at least 5% of the total number of employees. If greater than 100 worldwide employees, create new jobs equal to at least 10% of worldwide employment (or 50 new jobs, whichever is less). The non-refundable income tax credit equals 50% of the income tax withheld on new jobs created in the state. This percentage increases to 75% if the business expansion project is located in an “underserved area.” EDGE credits are processed annually. Program recipients can receive credits for up to 10 years. All credit awards are based upon employment ramp-up plans outlined by the business and agreed to by the Department.
Similar to EDGE, except the tax credit is refundable. Businesses must have been incorporated 10 years ago or less, never had any Illinois income tax liability, and be ready to hire full-time W2 employees to be eligible.
Blue Collar Jobs Act (BCJA) Tax Credit Program
The Blue Collar Jobs Act (BJCA) program supports large-scale economic development activities by providing corporate income tax credits to companies that make substantial capital investments in Illinois. The tax credits are based on the wages paid to construction workers employed on eligible projects. The project must be located in an Enterprise Zone (EZ) or have an agreement under the Economic Development for a Growing Economy (EDGE) Program. Eligible companies may receive up to 75 percent income tax withholding credits for construction workers.
Business Attraction Prime Sites Capital Grant Program
The Prime Sites Capital Grant Program assists companies with large-scale capital investment projects that commit to significant job creation for Illinois residents as they relocate or expand operations within Illinois. Award amounts for eligible projects will be determined by formula, and an applicant may apply for a grant of up to $10,000 per new job created. Must hire at least 50 new employees who are Illinois residents to work onsite where the capital project is located and make a $40 million investment. Eligible projects may include new construction and renovation of industrial and commercial facilities, as well as associated infrastructure improvements and the purchase and installation of durable equipment. Construction or renovation of facilities to be used as warehouses is not eligible.
Industry Specific Programs
Illinois has created specific programs for industries that are aligned with the state’s strategic economic plan. These programs offer a mixture of income tax credits, low interest loans, grants, and sales and/or property tax abatement. Click on the link to learn more specific details:
- Microchips: Manufacturing Illinois Chips for Real Opportunity Act (MICRO)
- Renewable Energy and Electric Vehicles: Reimagining Energy and Vehicles (REV) Illinois Program
- Data Centers: Data Center Investment Program
Major Local Programs
Tax Increment Financing
In Illinois, municipalities can create Tax Increment Financing (TIF) Districts in which they have certain financial tools to incentivize development. In TIF Districts, cities can rebate property taxes generated by a project for up to 23 years (dependent on when the TIF was created). In some cases, cities will monetize property tax rebates by providing the business with a cash grant or loan in advance and repaying themselves through incremental property tax revenue. Most municipalities in Greater Peoria have one or more TIF Districts.
This is a statewide program that is administered locally. Enterprise Zones are geographically bounded but can be expanded to accommodate a potential project. There are four Enterprise Zones in Greater Peoria (two each in Peoria and Tazewell counties). Development in an Enterprise Zone is incentivized via:
- 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
- Blue Collar Jobs Act construction tax credits (see above)
- Limited abatement of property tax increment if outside of a TIF District
Other State Programs
The program supports large-scale economic development activities by providing tax incentives to companies that make substantial capital investments in operations and create or retain an above average number of jobs. Eligible projects must invest a minimum of $12 million and create 500 full-time jobs, or $30 million investment with the retention of 1,500 full-time jobs.
Illinois Opportunity Zones https://dceo.illinois.gov/oppzn.html
The Illinois Venture Fund will make equity investments in Illinois-based companies or companies willing to move to Illinois. INVENT will match private equity investment dollar-for-dollar up to $6,000,000. The minimum investment is $10,000.
Illinois Angel Investment Tax Credit Program
The Illinois Angel Investment Tax Credit Program encourages investment in innovative, early-stage companies to help obtain the working capital needed to further the growth of their company in Illinois. Investors in companies that are certified as Qualified New Business Ventures (QNBVs) can receive a state tax credit equal to 25% of their investment (up to $2 million). Investors in companies that are designated Set-Aside QNBVs can receive a tax credit equal to 35% of their investment (up to $2 million).
For research activities conducted in the state of Illinois, an R&D credit is available against income taxes until January 1st, 2027. You can calculate it as 6.5% of qualified expenses over a basic amount. The base amount is the average of the Qualified Research Expenditure (QRE) attributable to Illinois over the previous three years. Credits that are beyond what can be used in a tax year may be carried over for up to five years.
Illinois Apprenticeship Education Expense Tax Credit Program
Employers are allowed a tax credit for qualified educational expenses associated with qualifying apprentices. Employers may receive a credit of up to $3,500 per apprentice against the taxes imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, and an additional credit of up to $1,500 for each apprentice if (1) the apprentice resides in an underserved area or (2) the employer’s principal place of business is located in an underserved area.
Opportunity Zones are a federal tax incentive program that defers and reduces taxes on capital gains if invested in Qualified Opportunity Zone Funds in Qualified Opportunity Zones. Opportunity Zones are a subset of low-income census tracts. There are Qualified Opportunity Zones in Peoria, Pekin, Havana and Lincoln. (Map at link)
Community Development Block Grants
CDBG grants are awarded by the State of Illinois to a local municipality who then provides a grant to a business for certain eligible capital expenditures such as acquisition of property, purchase or installation of fixtures and equipment, or construction, reconstruction, installation or rehabilitation of commercial or industrial buildings. Maximum grant is $1 million and based on job creation and investment level. Not available within the city limits of Peoria or Pekin.
Low Interest Financing
There are various forms of government backed financing that can help reduce interest rates for eligible projects. This ranges from industrial revenue bonds that can finance an entire project to “gap” loan products that can help bridge the gap between total need and ability to borrow. Below are links to a variety of state and local programs:
- Tri-County River Valley Development Authority – low interest industrial bonds
- Advantage Illinois – Loan participation or guarantee of up to 50% of total loan
Peoria County Government Assistance Program – a suite of low-interest loan products