Illinois Incentives and Workforce Development Guide
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ADVANTAGE Illinois: Accelerates investments and eases the credit crunch for small businesses, thanks to more than $78 million from the federal State Small Business Credit Initiative (SSBCI) of the Small Business Jobs Act of 2010. Advantage Illinois consists of three programs to spur institutional lending to small businesses and one program to leverage private venture capital in start-ups and high-growth businesses. Illinois expects to generate $10 in new private lending for every $1 of federal funding provided through this program.
Large Business Development Program (LBDP): For companies undertaking a major expansion or relocation. Funds may be used by large businesses for bondable business activities including financing the purchase of land or buildings, building construction or renovation and certain types of machinery and equipment.
Community Development Assistance Program for Economic Development (CDAP-ED): A federally funded program designed to provide grants to units of local government for economic development activities related to private business retention or expansion. Local governments can make their grant funds available as loans to businesses growing or moving to their community. Funds may be used for machinery and equipment, working capital and building construction and renovation.
Community Service Block Grant (CSBG) Loan: Administered jointly by the Illinois Department of Commerce and Economic Opportunity, statewide Community Action Agencies and Illinois Ventures for Community Action, the program provides long-term, fixed-rate financing to new or expanding small businesses in exchange for job creation and employment for low-income individuals. CSBG funds usually make up between 20% to 49% of the entire loan project and have a low interest rate of 5% to 7.5%.
Illinois Department of Agriculture AgriFIRST Grant: Designed to provide grants to persons and agribusinesses in Illinois for the purpose of developing projects that enhance the value of agricultural products or expand agribusiness in Illinois.
Business Development Public Infrastructure Program (BDPIP): Designed to provide grants to units of local government for public improvements on behalf of businesses undertaking a major expansion or relocation project that will result in substantial private investment and the creation and/or retention of a large amount of Illinois jobs. The infrastructure improvements must be made for public benefit and on public property and must directly result in the creation or retention of private sector jobs. The local government must demonstrate clear need for financial assistance to undertake the improvements. Grant eligibility and amounts are determined by the amount of investment and job creation or retention involved.
New Markets Development: Provides supplemental funding for investment entities that have been approved for the Federal New Markets Tax Credit (NMTC) program. This program supports small and developing businesses by making capital funds more easily available, in turn making Illinois more attractive to possible investors. It provides state and federal tax credits to investors who make investments into approved funds that invest in eligible projects located in low-income census tracks throughout Illinois. The program provides non-refundable tax credits to investors in qualifying Community Development Entities (CDE’s) worth 39% of the equity investment made into the CDE over a seven-year credit allowance period.
Economic Development for a Growing Economy (EDGE): An incentive program that encourages companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. The non-refundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years.
Illinois Angel Investment Credit Program: The purpose of the Angel Investment Program is to attract and encourage the placement of investment dollars into early stage, innovative companies throughout Illinois. The investment dollars provide these companies with much needed access to working capital to further their growth and success in the state. The Angel Program is allocating $10 million in tax credits annually, from 2011-2016 and offers a tax credit to qualifying claimants in an amount equal to 25% of the claimant’s investment made directly in a qualified new business venture.
Small Business Jobs Creation Tax Credit: Provides small business owners and non-profits with an extra boost to grow their businesses over the next four years. After creating one or more new, full-time positions that meet the eligibility requirements, small businesses can register online to receive a $2,500 per job tax credit. The program is for new jobs created July 1, 2012 to June 30, 2016.
Illinois Historic Preservation Tax Credit Program: Provides a state income-tax credit equal to 25% of a project’s qualified expenditures to owners of certified historic structures located within River Edge Redevelopment Zones (Aurora, East St. Louis, Elgin and Rockford) who undertake certified rehabilitations during the taxable year. An awarded tax credit may not be sold or otherwise transferred to another person or entity. The Illinois Historic Preservation Tax Credit Program runs from January 1, 2012 to December 31, 2016.
Enterprise Zone: Designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state. This is accomplished through state and local tax incentives, regulatory relief and improved governmental services.
High Impact Business (HIB): Designed to encourage large-scale economic development activities by providing tax incentives (similar to those offered within an enterprise zone) to companies that propose to make a substantial capital investment in operations and that will create or retain an above-average number of jobs. Businesses may qualify for investment tax credits, a state sales tax exemption on building materials, an exemption from state sales tax on utilities, a state sales tax exemption on purchases of personal property used or consumed in the manufacturing process or in the operation of a pollution control facility. The project must involve a minimum investment of $12 million causing the creation of 500 full-time jobs or an investment of $30 million causing the retention of 1,500 full-time jobs. The investment must take place at a designated location in Illinois outside of an Enterprise Zone.
River Edge Redevelopment Zone: Designed to revive and redevelop environmentally challenged properties adjacent to rivers in Illinois through the use of several incentives authorized by State law. Sales tax exemption and property tax abatement (if offered in the zone) are administered by the local zone administrators and the others involve tax incentives that may be claimed on Illinois Income Tax filing.
Tax Increment Financing (TIF) District: Illinois law allows units of local governments the ability to designate areas within their jurisdiction as TIF districts. They are used by local governments as a way to spur economic growth by dedicating the sales tax revenues and additional property tax revenues generated within the TIF for improvements within the district with the hope of encouraging new economic development and jobs.
Employer Training Investment Program (ETIP) – Competitive Component: The Employer Training Investment Program (ETIP) is a competitive application program for Illinois-based manufacturers and service companies to facilitate upgrading the skills of their workers in order to remain current in new technologies and business practices. Participation in the program will enable companies to remain competitive, expand into new markets and introduce more efficient technologies into their operations. ETIP grants may reimburse Illinois companies for up to 50% of the eligible cost of training their employees. Grants may be awarded to individual businesses, intermediary organizations operating multi-company training projects and original equipment manufacturers sponsoring multi-company training projects for employees of their Illinois supplier companies.