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FAQ Topic: Enterprise Zone FAQs

What is the Enterprise Zone investment tax credit?

The Illinois Income Tax Act 35 ILCS 5/201, as amended allows a .5 percent credit against the state income tax for investments in qualified property, which is placed in service in an enterprise zone. The investment tax credit will be filed for on your yearly tax return.

What qualifies as “building materials” eligible for sales tax exemption?

Building materials that are eligible for the enterprise zone sales tax deduction include items that are permanently affixed to real property such as lumber, mortar, glued-down carpets, paint, wallpaper and similar affixed items. Please contact the Zone Administrator if you have further questions on what is considered an eligible building material.

What is the sales tax exemption?

The purchase of qualified building materials from a retailer that charges Illinois State Sales Tax is eligible for a sales tax exemption. Any contractor purchasing qualified building materials must submit an application to the Enterprise Zone Administrator. The application information will then be given to the Illinois Department of Revenue (IDOR) and they will issue … Continued

What is the Enterprise Zone property tax abatement incentive

Properties located within the Enterprise Zone boundaries may have a part of its property taxes abated. The portion abated includes the added improvements to the property. This means the abatement amount will be the property tax increment that is created from the improvement. Taxes are not abated on the existing property value.  

What incentives does the Effingham Enterprise Zone Offer?

Property tax abatement (property tax abatement is not available when the Enterprise Zone and TIF overlap) Industrial – 7 years Commercial – 3 years Newly constructed multi-family residential – 3 years Newly constructed single-family residential – 5 years Sales tax exemption for permanently affixed building materials on industrial and commercial projects, newly constructed single-family and … Continued

What is the Enterprise Zone?

The Illinois Enterprise Zone Act was signed into law December 7, 1982.  The purpose of the Act is to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state.  Businesses located (or those that choose to locate) in a designated enterprise zone can become eligible to obtain special state and local tax incentives, regulatory relief, and improved governmental … Continued

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