State and Local Tax Alert - February 2017

February 2017

Illinois Extends Sunset Date for EDGE Income Tax Credit until April 30, 2017

 

Summary

On January 20, 2017, Illinois Governor Rauner signed S.B. 513, which extended the sunset date of the Illinois Economic Development for a Growing Economy (“EDGE”) credit from December 31, 2016, to April 30, 2017.
The EDGE credit is the primary incentive tool used by the State of Illinois and the Illinois Department of Commerce and Economic Opportunity (“DCEO”) to attract expansion projects to the State by new and existing businesses that commit to creating jobs and making capital investment in Illinois.
 

Details

The EDGE income tax credit program was established to help encourage job creation and capital investment in Illinois.  The credit is available to qualified businesses that can provide evidence that, but for the EDGE credit, Illinois would not have been selected as the site for the expansion project.

Successful businesses can receive an annual corporate income tax credit worth a percentage of the personal income taxes withheld for qualifying jobs.  The credit can be claimed annually for up to 10 years, and unused credit can be carried forward five years. 

In order to qualify for the credit, eligible businesses must commit to:
  • Creating at least 25 new, full-time jobs at a project location in Illinois and making a capital investment of at least $5 million; or
  • Creating at least five new, full-time jobs and making a capital investment of at least $1 million, for businesses with fewer than 100 employees. 
The job creation and capital investment must be made within a two-year period.  Capital investment includes the purchase or lease of buildings, structures, equipment, land and furnishings.
The extension of the sunset date to April 30, 2017, means agreements may not be executed beyond that date.  In order to satisfy this requirement, DCEO has advised taxpayers that EDGE applications must be received no later than March 31, 2017.
 

BDO Insights

There is a limited amount of time for companies that are considering Illinois for the site of an expansion project to apply for benefits under the EDGE program.  Companies creating jobs and making capital investment are encouraged to apply for EDGE benefits as well as pursue other State and local incentives available for competitive expansion projects.
 
 

For more information, please contact one of the following regional practice leaders:
 

West:   Atlantic:
Rocky Cummings
Tax Partner

 
  Jeremy Migliara
Tax Managing Director

 
Paul McGovern
Tax Managing Director
  Jonathan Liss
Tax Managing Director

 
Northeast:   Central:
Janet Bernier 
Tax Partner

 
  Angela Acosta
Tax Managing Director

 
Matthew Dyment
Tax Principal

 
  Nick Boegel
Tax Managing Director

 


Southeast:
  Joe Carr
Tax Principal

 
Ashley Morris
Tax Managing Director

 
  Mariano Sori
Tax Partner

 
Scott Smith
Tax Managing Director

 
  Richard Spengler
Tax Managing Director

 
Tony Manners
Tax Managing Director






 
 

Southwest:
Gene Heatly
Tax Managing Director

Tom Smith
Tax Partner