Illinois Direct Financial Incentives
Illinois' economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment.
Corporate Taxes & Incentives Guide
The Advantage Illinois program is designed to provide Illinois businesses and entrepreneurs with access to the capital they need to start new companies and expand existing business. The program is comprised of multiple programs to spur institutional lending, including Capital Access Program, Participation Loan Program-which includes a component for Minority/Women/Disabled/Veteran-Owned businesses, and Collateral Support Program; and the Invest Illinois Venture Fund, which leverages private investments in start-ups and high-growth businesses.
The Business Development Public Infrastructure Program (BDPIP) provides low-interest and grant financing to units of local government for public improvements on behalf of businesses undertaking expansion or relocation projects.
The Large Business Development Program (LBDP) provides incentive financing to encourage large out-of-state companies (500 or more employees) to locate in Illinois, and also encourages existing Illinois companies to undertake major job expansion or retention programs.
The Community Development Assistance Program (CDAP) helps communities meet their economic development, housing, and public infrastructure needs. Grants are made to smaller local governments to benefit low- and moderate-income citizens.
The Community Services Block Grant Program (CSBG) addresses poverty issues in Illinois communities. CSBG provides low-interest loans to businesses that agree to hire low-income persons.
The Manufacturing Extension Partnership of Illinois provides manufacturers with access to information and technology expertise, enabling them to modernize their operations and become more efficient.
The Large Customer Energy Efficiency Program (LEAP) is a program through the Illinois Energy Now Energy Efficiency Portfolio. This program targets larger customers such as municipalities, colleges, hospitals and industrial sites. The process creates a sustainable energy plan starting with workshops to benchmark and develop an energy performance scorecard. The next step is to define the organization's baseline and draft a sustainable energy plan, which includes 25 hours of free technical assistance to finalize plan and begin implementation. The final step is a follow-up networking session with the participating organizations to share best practices and lessons learned. This program has successfully assisted Illinois Large Energy Customers manage their energy costs by making cost-effective efficiency improvements.
The Recycling Expansion and Modernization (REM) Program awards matching grants to Illinois organizations and businesses to expand their recycling programs and meet waste reduction goals while demonstrating public economic benefits. Grants are provided to divert materials from the municipal solid waste stream, thereby conserving our natural resources, and improving the performance and "bottom line" of Illinois businesses and organizations (reduced operating costs, increased sales, etc.).
The Illinois Recycling Grants Program helps communities, businesses, and not-for-profit organizations collect and process materials for recycling. Periodically, the program will issue requests for applications to fund traditional (fiber, metal, glass, and plastic) recycling efforts. The program will also periodically issue requests for applications to fund other items, with a recent focus on computer and electronics recycling.
The Illinois Renewable Fuels Research, Development, and Demonstration Program funds research, development, planning, and education projects that are designed to accelerate the use of renewable fuels technologies and reduce related production costs. The primary focus of the program is biofuels (ethanol and biodiesel) production and utilization.
The Energy Efficient Affordable Housing Construction Program provides grants to Illinois based non-profit and for-profit housing developers to include energy efficient building practices in the rehab or new construction of affordable housing units. Average energy savings range from 50-75 percent.
Small Business Assistance and Entrepreneurship Development:
Through the Illinois Entrepreneurship Network (IEN), DCEO is providing a formalized structure for coordinated services to small businesses and entrepreneurs throughout the state. The IEN represents a comprehensive network of resources designed to strengthen the state's capacity to develop small businesses into market successes and help entrepreneurship act as a more dynamic engine of growth. IEN partners include: Entrepreneurship Centers, Small Business Development Centers, Procurement Technical Assistance Centers, International Trade Centers, and Manufacturing Extension Centers.
As part of the IEN, Entrepreneurship Centers provide up to $5,000 matching challenge grants and a number of other specialized resources for its clients. The grant awards assist entrepreneurs or small businesses with obtaining professional services for comprehensive business plan assistance, evaluation of a proposed startup or expansion or other accelerated support purposes. Award funding is determined based on the potential for successful achievement of a significant business milestone for client firms.
The IEN also works with individual companies, women's professional associations, and minority entrepreneurs to start or expand a business and provide support and counseling. The network of statewide offices provides information, referral, and procurement assistance, and serves as an information conduit to business resources throughout the state, while advocating work with individual companies and professional associations to find answers to the wide range of questions that arise from business ownership.
The Illinois Small Business Environmental Assistance Program provides free, confidential compliance for small businesses to help them understand regulatory requirements under the Clean Air Act Amendments. Located in the non-regulatory agency, the staff offers permit assistance for the Clean Air Act, operates a toll-free help line, and conducts hands-on workshops and seminars on environmental issues. The program also operates a clearinghouse of more than 300 environmental publications, including rules, fact sheets, guides, case studies, and a listing of Illinois environmental service companies.
The Illinois Onsite Safety and Health Consultation Program helps Illinois small businesses meet current OSHA regulations and develop an ongoing safety and health program, through onsite safety surveys, industrial hygiene surveys, health and safety program audits, training and education, and management program development and assistance. These consulting services are provided at no cost to the business.
The Neighborhood Recovery Plan includes $5 million for lending to small businesses under 50 employees or entrepreneurs with solid plans. Start-ups may apply for loans from $500-$50,000, and existing businesses can apply for loans of $500-$75,000. The state is partnering with community lenders, including ACCION Chicago, Chicago Community Ventures (CCF), and Illinois Ventures for Community Action (IVCA).
The Illinois Small Business Job Creation Tax Credit gives small business owners, with 50 employees or less, a $2,500 tax credit for each new, eligible job created.
The Small Business $mart Energy Program (SB$E) provides energy efficiency technical services for small to medium-sized, for-profit businesses. The technical services can identify opportunities for energy savings through intelligent building design and efficient building components and systems. SB$E services are provided by the Smart Energy Design Center (SEDAC) with staff from the University of Illinois at Champaign-Urbana School of Architecture and the Geothermal Heat Pump Consortium. SEDAC works with building owners, business operators, architects, engineers, contractors, and other industry professionals to incorporate this whole building approach.
Work force development and job training:
The Employer Training Investment Program (ETIP) supports Illinois workers' efforts to upgrade their skills in order to remain current in new technologies and business practices, enabling 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 percent of the 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.
The bulk of employment and training services administered by DCEO are offered through 26 Local Workforce Investment Areas statewide. Illinois workNet Centers are available in many communities, as well as online at www.IllinoisworkNet.com, to get people the skills they need to get back to work. Funds come primarily from the federal Workforce Investment Act.
Additional Assistance/Incentives:
The Illinois Economic Development for a Growing Economy Program (EDGE) Program offers a special tax incentive to encourage companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. Qualifying businesses must create new jobs and make capital investments in Illinois. The program provides 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 nonrefundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years. To qualify, a company must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full time jobs in Illinois. For a company with 100 or fewer employees, the company must agree to make a capital investment of $1 million and create at least five new full time jobs in Illinois.
The Enterprise Zone Program is designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state. Enterprise Zones offer a number of state and local tax incentives to businesses that make investments to create or retain jobs in any of the 96 certified zones located in communities throughout the state.
The River Edge Redevelopment Program is designed to revive and redevelop environmentally challenged properties adjacent to rivers in Illinois. The River Edge Redevelopment Zone Act authorizes DCEO to designate zones in four cities: Aurora, East St. Louis, Elgin, and Rockford.
The Illinois New Markets Development Program provides supplemental funding for investment entities that have been approved for the Federal New Markets Tax Credit (NMTC) program. This program will support small and developing businesses by making capital funds more easily available and will make Illinois more attractive to possible investors. The NMTC program provides state and federal tax credits to investors that make investments into approved funds, which will make investments 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 percent of the equity investment made into the CDE over a seven-year credit allowance period.
The Illinois Angel Investment Credit Program is designed to offer a tax credit to interested firms or natural person(s) who make an investment in one of Illinois' innovative, qualified new business ventures. The investment will encourage job growth and expand capital investment in Illinois. The program can offer a tax credit to qualifying firms in an amount equal to 25 percent of their investment made directly in a qualified new business venture. The maximum amount of an investment that may be used as the basis for a credit under this section is $2 million for each investment directly in a qualified new business venture.
The High Impact Business Program (HIB) is designed to encourage large-scale economic development activities by providing tax incentives to companies that propose to make a substantial capital investment in operations and will create or retain 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 manufacturing equipment purchases, repair and replacement parts. The project must involve a minimum of $12 million investment 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. The program has been expanded to include qualified new electric generating facility, production operations at a new coal mine or, a new or upgraded transmission facility that supports the creation of 150 Illinois coal-mining jobs, or a newly constructed gasification facility as a "Coal/Energy High Impact Business." In 2009, the program was further expanded to include wind energy facilities. The designation as a Wind Energy/High Impact Business is contingent on the business constructing a new electric generation facility or expanding an existing wind power facility.
Tax-increment financing allows a community to capture the increase in property taxes that result from a redevelopment project to pay for the costs involved in the project.
The Illinois Finance Authority is a self-supporting state agency that encourages economic development in the state by providing access to capital. The assistance provided by the authority includes: tax-exempt and taxable industrial revenue bonds; employee stock ownership plans; direct loans; refinancing for outstanding bonds; rural development loans; solid-waste-disposal revenue bonds; multifamily housing revenue bonds; and financing for not-for-profit groups and local government.
The Illinois Department of Transportation has three grant programs that can help provide the necessary road and rail access to a site: the Economic Development Program, the Truck Access Route Program, and the Rail Freight Program.
The Auto Adjustment Entrepreneurial Support Initiative from the U.S. Department of Commerce's Economic Development Administration will help create jobs by expanding entrepreneurship efforts in this region. It is one of a series of grants by the U.S. Department of Commerce to help communities recover from plant closures and layoffs by automotive manufacturers and suppliers. The source of the funds is the Midwest Flood Relief Fund. The premise is that job diversity can minimize economic disruption during disasters, as well as plant closures and layoffs by automotive manufacturers and suppliers. It applies to Boone and Winnebago counties.
Illinois State Contact:
Illinois Department of Commerce & Economic Opportunity
Adam Pollet, Director
James R. Thompson Center
100 W. Randolph
Chicago, IL 60601
Phone: 312-814-7179 Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated November 2014.