An enterprise zone is a specific area designated by the State of
Investment Tax Credit- The state of
Examples of qualifying property:
Jobs Tax Credit- Employers in an Enterprise Zone may
obtain a tax credit on their
Amount of Credit.
Carry Forward. This credit may be carried forward up to 5 years.
Employer Advertising. An employer seeking to obtain the jobs tax credit can advertise with the local SSG or SDA, note that the business is within an enterprise zone, and specify that the business seeks to hire workers certified as eligible for services under Titles II or III of JTPA....
Point of sale exemption.
Eligible building materials.
Ineligible Items. Items not qualifying include tools, machinery, free standing appliances and tacked-down carpeting.
Retailer Separate from Contractor.
Machinery Or Pollution Control.- A similar 6.25% state sales tax exemption is available on purchases of personal property used in the assembly or manufacturing process or in the operation of a pollution control facility within an enterprise zone.
Eligible Personal Property.
Utility Tax Exemption - A state utility tax exemption on gas, electricity and telecommunications is available to businesses located in enterprise zones.
Property Tax Abatement in
Abatement vs. Assessment
Reduction. Assessment reduction means to reduce the value of real estate so
that when the value is multiplied by local tax rates, the resulting taxes will
be lower. The assessment reduction incentive is available in
Abatement In A Zone. Any taxing district may order the county clerk to abate a portion of its taxes on new construction or renovation of real property located in a zone. The increase in assessed value due to new construction, rehabilitation or renovation is left untaxed for a term set by local ordinance.
Calculating the Abatement.
Property Value = Land + Existing Buildings + Improvements. When valuing property, each local assessing officer sets a value on the land. He or she next determines a value for the buildings and other improvements. These are added together to obtain the parcel's assessed value.
Improvements Assessed. Every time a property is improved, it is reassessed, even if it would not have been scheduled for a reassessment that year. The property will be reassessed once the assessing official receives notice that a building permit has been issued. Limited to Increase. Any abatement obtained will apply only to taxes on the increase in assessed value attributable to the new construction, renovation, or rehabilitation. Taxes based on the land value and previously existing improvements continue to be collected.
Multiplier or Equalizer. Incentives or abatements do not affect the multiplier. The multiplier or equalization factor is the application of a percentage increase or decrease, generated by the Illinois Revenue Department, in order to adjust assessment levels in various counties to the same percentage of full value. By law the average assessed value of all property in a county is required to be 1/3 of the market value of that property.
Tax Rates. Does the abatement of taxes on improvements in an enterprise zone affect the tax rate?
Under the Enterprise Zone Program, the value of abated property is subtracted from the tax base prior to the calculation of the tax rate.
No TIF Abatements.
No Automatic Abatement Eligibility.
Property Tax Reduction in
Reduces 36% to 16%.
Industrial property in
Available only in
Apply Before Construction.
Abandoned Property. Note carefully the definition of "abandoned property"....
Year of construction.
Assessed value on increase. Even though a property's assessment ratio was reduced via an incentive granted by the Assessor, note that he is not precluded from trying to raise that property's assessed value.
Zones can offer other incentives
including land cost write-downs and building fee waivers.
Example. Commonwealth Edison and Sears do not qualify because they operate throughout the State and do not conduct substantially all of their operations in enterprise zones.
Corporate Contribution Deduction.
Income Tax Deduction For Financial Institutions.
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