Tax Credits and Exemptions

Tax Credits for Businesses

Data Centers Tax Credits & Incentives

The data centers investment program provides owners and operators with exemptions from a variety of state and local taxes for qualifying Illinois data centers. The program also provides data center owners and operators with a tax credit of 20% of wages paid for construction workers for projects located in underserved areas.

EDGE Tax Credit (Economic Development for a Growing Economy)

Provides special tax incentives to encourage companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. EDGE 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. Non-refundable credits can be used against corporate income taxes to be paid.

Rivers Edge Tax Credit

The 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, Peoria & Rockford) who undertake certified rehabilitations during the taxable year.

Tech-Prep Youth Vocational Programs Credit

A 20% credit for a business primarily engaged in manufacturing for direct payroll expenses for qualifying cooperative secondary school youth vocational programs in Illinois or for personal services performed by a TECH-PREP student.

Dependent Care Assistance Program Credit

A 5% credit for a business primarily engaged in manufacturing for on-site dependent care expenses.

Employee Child Care Tax Credit

A 30% credit for startup costs and 5% of annual costs of providing a child care facility for children of employees.

Research and Development Credit

A 6.5% credit for qualifying expenses in support of research and development.

Ex-Felons Job Credit

A 5% credit of wages for ex-offenders, not to exceed $1,500 per employee.

Veterans Job Credit

A 10% credit for wages paid to an employee who is a veteran and a 20% credit to an employee who was a veteran that was previously unemployed.

Student-Assistance Contribution Credit

A 25% credit, not to exceed $500 per employee, for a business to make a matching contribution to a qualified pre-paid tuition program.

For more information on claiming tax credits, please see the IL Department of Revenue 2014 Schedule 1299-D Instructions.

Sales Tax Exemptions for Businesses

Equipment Exemption / Sales Tax Exemption

Sales Tax exemption for the purchase of machinery and equipment for manufacturing, assembling tangible personal property, agriculture, coal and aggregate mining.

Rolling Stock Exemption

Sales Tax exemption for automobile purchase for interstate carriers.