Illinois – Amendments to the South Suburban Airport and Enterprise Zones, High Impact Businesses, and Redevelopment Zone Provisions

SALT Report 2974 – Recently enacted legislation in Illinois amends the exemption for river edge development zones and creates additional exemptions, credits, and information reporting requirements for the South Suburban Airport, high impact businesses, and redevelopment zones.

Enterprise Zone Credits

Enterprise zone credits that may be claimed against Illinois sales and use tax liabilities for a term of 20 years may be extended by a municipal or county ordinance for an additional 10 years.  In addition, any credit that is scheduled to expire before July 1, 2016, may have that date extended until July 1, 2016 by a municipal or county ordinance.  All applications for extension must be submitted by December 31, 2014.

South Suburban Airport Building Materials Sales Tax Exemption

Effective July 25, 2013, a sales tax exemption is available for retailers that make qualified sales of building materials for incorporation into the South Suburban Airport by remodeling, rehabilitating, or new construction. To document the exemption, the retailer must obtain a copy of the Department of Transportation issued certificate of eligibility for sales tax exemption from the purchaser.  In addition, the retailer must obtain a certificate from the purchaser that contains the following information:

  • A statement that the building materials are being purchased for incorporation in the South Suburban Airport in accordance with the Public-Private Agreements for the South Suburban Airport Act,
  • The location or address of the project into which the building materials will be incorporated,
  • The name of the project,
  • A description of the building materials being purchased, and
  • The purchaser’s signature and date of purchase

River Edge Redevelopment Zones Building Materials Sales Tax Exemption

The exemption for qualified sales of building materials to be incorporated into real property within a River Edge Redevelopment Zone has been amended.  Effective July 1, 2013, the retailer is required to obtain the purchaser’s River Edge building materials exemption certificate to document the exemption.

By request of a municipality in which a building project is located, the Department of Revenue will issue a River Edge building materials exemption certificate for each construction contractor or entity identified by the municipality’s corporate authorities. The construction contractor or entity cannot make tax-free purchases until it has an active exemption certificate.

The Department may refuse to issue a certificate if an owner, partner, corporate officer, manager or member of the construction contractor or other entity is or has been the owner, partner, corporate officer, manger or member that has unpaid fees or sales tax liabilities.

In addition, if the Department determines that a person has made a tax-exempt purchase that was not eligible for the exemption, or allowed another non-eligible person to make a tax-exempt purchase, the Department may impose penalties on the person equal to the sales taxes that would have been paid by the retailer on the purchase, as well as any applicable local sales taxes.

Annual Exemption Information Reports

Each contractor or entity that holds an enterprise zone building materials exemption certificate or a high impact business exemption certificate must annually report to the Department the value of the enterprise zone or high impact business building materials exemption. The first report will be for the 2013 calendar year and will be due no later than May 31, 2014.

Additionally, every contractor or entity that holds a River Edge building materials exemption certificate must annually report to the Department the total tax benefit received under the River Edge building materials exemption. The first report will be for the 2013 calendar year and will be due no later than May 31, 2014.

For Further Information

Illinois General Assembly – Senate Bill 20, Laws 2013