The advancing innovative manufacturing for Illinois tax credit act.
Required investment
The Advancing Innovative Manufacturing for Illinois Tax Credit program is operated by the Illinois Department of Commerce and Economic Opportunity (DCEO) and designed to offer a special tax incentive to encourage businesses to locate or expand operations in Illinois with a minimum $10 million capital improvement investment related to the manufacturing of critically needed goods. The program can provide tax credits to qualifying businesses up to 7% of eligible capital improvements made to a new or existing facility for the purpose of modernizing, upgrading, automating or streamlining a manufacturing or production process. ‘Capital improvements’ means the purchase, renovation, rehabilitation or construction of permanent tangible land, buildings, structures, equipment and furnishings at an approved project site in Illinois and expenditures for goods or services that are normally capitalized, including organizational costs and research and development costs incurred in Illinois.
Credit awards
The non-refundable credits will not exceed 7% of the applicant’s total capital improvement investments for the year for which the applicant seeks credit. This credit is used to offset income tax liabilities, although under certain circumstances, the credits can be carried forward up to 10 years. In addition, certain specified taxpayers may elect to offset their employer payroll withholding obligations as opposed to their income tax liability. The DCEO will determine the amount and duration of the credit awarded as described under the law and applicable regulations.
The credit amount is determined based on the total amount of capital improvement investment made by the taxpayer. A capital improvement investment of $10,000,000 or more, but less than $50,000,000, results in a maximum credit of 3% of the capital improvement amount; a capital improvement investment of $50,000,000 or more, but less than $100,000,000, results in a maximum credit of 5% of the capital improvement amount; and a capital improvement investment of $100,000,000 or more results in a maximum credit of 7% of the capital improvement amount. Projects may be granted a tax credit award that reflects investments made within a maximum five-year period.