World Business Chicago Incentives Without Location

Overview of Potential Incentives for

Chicago Relocations and Expansions

BUSINESS DEVELOPMENT

WBC assists businesses with all aspects of

location, expansion and retention support,

including site selection and government relations,

and promotes Chicago’s talent, technology,

infrastructure, housing, and cultural resources to

companies across the nation and globe.

Disclaimer: All financial incentive packages are subject to application review and

approval by the applicable government agency (Federal Government, State of

Illinois, Cook County or City of Chicago), and incentives must be agreed to prior to

project commencement or lease signings. Please contact World Business

Chicago for more information. This is an overview of major programs available;

some others may also be applicable.

Table of Contents

Incentives:

City of Chicago Incentives

Cook County Incentives

State of Illinois Incentives

Federal Incentives

Additional Incentives

Page Number:

4 - 5

6 - 8

9 - 13

14 - 15

16 - 17

City of Chicago Incentives

City of

Chicago

Incentives

Financial Tools That Are Available:

1.) Tax Increment Financing (TIF)

2.) Small Business Improvement Fund (SBIF)

3.) Industrial Development Bonds

4.) Small Business Loan Program

Chicago Incentives

Program Description Type

Tax Increment Financing (TIF)

TIF is a special funding tool used by the City of Chicago to promote public and private investment across

the city. Funds are generated by growth in the Equalized Assessed Valuation (EAV) of properties within a

designated district over a 23-year period.

Grant

Small Business Improvement Fund

(SBIF)

The Small Business Improvement Fund (SBIF) provides grant funding for permanent building improvements

and repairs across the city. Offered to tenants and owners of industrial and commercial properties, SBIF

grants are funded by TIF revenues in designated TIF districts citywide. The grant can cover between 30 to

90% of the cost of remodeling work, with a maximum grant of $150,000 for commercial properties and

$250,000 for industrial properties. Offered on an area rotation basis.

Grant

Industrial Development Revenue Bonds

The City of Chicago issues tax-exempt Industrial Development Revenue Bonds (IDBs) and lends their

proceeds to manufacturing companies to finance qualified development projects. IDB proceeds may also be

used for either new construction or renovation. Tax-exempt bond financing offers long-term financing at

rates lower than conventional financing. Bond proceeds are limited to facilities that are primarily used to

manufacture or process tangible products or The acquisition of fixed assets such as land, buildings and

equipment.

Low Cost Financing

Small Business Loan Program

Small business loans up to $250,000 are available through a partnership between the City of Chicago

Treasurer’s Office and community-based lenders. The program targets a variety of small and high-growth

companies that can utilize loan proceeds for equipment purchases, working capital, inventory, leasehold

improvements, expansion, contract purchase-order financing, and other uses.

Loan

City of Chicago Incentives

Cook County

Incentives

Financial Tools That Are Available:

1.) Class 6(b) Property Tax Incentive

2.) Class 7(a) Property Tax Incentive

3.) Class 7(b) Property Tax Incentive

4.) Class 7(c) Property Tax Incentive

5.) Class 8 Property Tax Incentive

6.) Class C Property Tax Incentive

Chicago Incentives

Program Description Type

Class 6(b) Tax Incentive

The Class 6B classification is designed to encourage industrial development throughout

Cook County by offering a real estate tax incentive for the development of new

industrial facilities, the rehabilitation of existing industrial structures, and the industrial

reutilization of abandoned buildings.

Property Tax Abatement

Class 7(a) Tax Incentive

The Class 7(a) programs offer real estate tax incentives for commercial projects in a

Redevelopment Area, Empowerment or Federal Enterprise Zone. Qualifying properties

can receive a 12-year reduction in real estate assessments from the standard Cook

County commercial rate of 25%. Qualifying properties are assessed at 10% for the first

10 years, 15% for the 11th year, and 20% for the 12th year. These projects have total

development costs, exclusive of land, that do not exceed $2M and would not be

economically feasible without the incentive.

Property Tax Abatement

Class 7(b) Tax Incentive

The Class 7(b) programs offer real estate tax incentives for commercial projects in a

Redevelopment Area, Empowerment or Federal Enterprise Zone. Qualifying properties

can receive a 12-year reduction in real estate assessments from the standard Cook

County commercial rate of 25%. Qualifying properties are assessed at 10% for the first

10 years, 15% for the 11th year, and 20% for the 12th year. These projects have total

development costs, exclusive of land, that exceed $2M and would not be economically

feasible without the incentive.

Property Tax Abatement

Cook County Incentives

Program Description Type

Class 7(c) Tax Incentive

The Class 7(c) Commercial Urban Eligibility (CURE) program offers real estate tax

incentives for commercial properties regardless of where they are located. Qualifying

properties can receive a five-year reduction in real estate assessments from the

standard Cook County commercial rate of 25% with no minimum investment

required. Qualified properties are assessed at 10% for the first three years, 15% for

the fourth year, and 20 percent for the fifth year. Properties must involve new

construction, substantial rehabilitation, or re-occupancy of abandoned commercial

property.

Property Tax Abatement

Class 8 Tax Incentive

The Class 8 program offers reduced Cook County property tax rates on commercial

and industrial projects in areas experiencing severe economic depression. Qualifying

properties can receive a 12-year reduction in real estate assessments from the

standard Cook County rate of 25%. Reduced rates are the same as the 6(b).

Property Tax Abatement

Class C Tax Incentive

The Class C program offers reduced Cook County property tax rates on commercial

and industrial properties, including abandoned property or vacant land, that have

substantial environmental contamination. Rates are the same as the 6(b).

Remediation costs must exceed $100,000 or 25% of the property market value in the

prior year.

Property Tax Abatement

Cook County Incentives

City of Chicago Incentives

State of

Illinois

Incentives

Financial Tools That Are Available:

1.) Illinois EDGE

2.) R&D Tax Credit

3.) Enterprise Zone

4.) EDGE Adjustments for Startups

5.) Reimagining Electric Vehicles (REV)

Illinois Program

6.) Electric Vehicle (EV) Charging

Station Rebate

7.) High Impact Business Program (HIB)

8.) Film Production Tax Credit

9.) Advantage Illinois

10.) Illinois Small Business Innovation

Research (SBIR) and Small Business

Technology Transfer (STTR)

Matching Funds Program

11.) Business Attraction Prime Sites

12.) Tax Incentives for Data Centers

Chicago Incentives

Program Description Type

Illinois EDGE Illinois’ EDGE program provides annual corporate tax credits to qualifying businesses which

support job creation, capital investment and improve the standard of living for all Illinois

residents.

Income Tax Credit

R&D Tax Credit A 6.5% credit against Illinois corporate income tax for spending on qualifying research

activities in Illinois (the baseline is a 3-year average of R&D investment in Illinois).

Income Tax Credit

Enterprise Zone A specific area designated by the State of Illinois in cooperation with a local government to

receive various tax incentives and other benefits to stimulate economic activity and

neighborhood revitalization.

Sales Tax

Abatement; Income

Tax Credit

State of Illinois Incentives

Program Description Type

EDGE Adjustments for Startups Designed to offer a special tax incentive to encourage businesses to locate or expand

operations in Illinois. The program can provide tax credits to qualifying businesses

equal to a portion of the amount of state income taxes withheld from the salaries of

employees in the newly created jobs. This incentive is applicable for startups that are

less than 5 years old.

Tax Credits

Reimagining Electric Vehicles

(REV) Illinois Program

REV Illinois offers competitive incentives to expand in or relocate to Illinois for

companies that manufacture EVs and EV parts (batteries, cathodes, anodes) as well as

EV charging stations. EV focused companies may qualify for exemptions on income tax

withholding, utilities tax, training, and equipment/capital costs.

Tax Credits

Electric Vehicle (EV) Charging

Station Rebate

Installation and maintenance of Level 1 and 2 charging stations are eligible to receive a

rebate of up to 80% of the eligible project costs. Additional rebates are available for EV

charging stations deployed in underserved and environmental justice communities.

Rebate

State of Illinois Incentives

Program Description Type

High Impact Business Program

(HIB)

The program supports large-scale economic development activities by providing

investment tax credits, state sales tax exemption on building materials and/or

utilities, state sales tax exemption on purchases of personal property used or

consumed in the manufacturing process or in the operation of a pollution control

facility to companies that make substantial capital investments in operations and

create or retain an above average number of jobs.

Tax Credits

Film Production Tax Credit A credit of 30% of all qualified expenditures, including post-production. Applicants will

receive an additional 15% tax credit on salaries paid to individuals (earning at least

$1,000 in total wages) who live in economically disadvantaged areas whose

unemployment rate is at least 150% of the State’s annual average.

Tax Credits

Advantage Illinois Advantage Illinois will accelerate investments and ease the credit crunch for small

businesses, thanks to more than $78 million from the federal State Small Business

Credit Initiative (SSBCI) of the Small Business Jobs Act of 2010.

Low Cost Financing

State of Illinois Incentives

Program Description Type

Illinois Small Business Innovation

Research (SBIR) and Small

Business Technology Transfer

(STTR) Matching Funds Program

The Illinois SBIR/STTR Matching Funds Program will provide a state match of 50

percent, up to $50,000, for qualifying Illinois companies who receive a Phase I

SBIR/STTR grant award.

Grant

Business Attraction Prime Sites The Business Attraction Prime Sites Capital Grant Program assists companies with

large-scale capital investment projects that commit to significant job creation for Illinois

residents as they relocate or expand operations within Illinois. Prime Sites grants can

encompass a wide range of economic development projects that will result in job

creation in the state of Illinois.

Grant

Tax Incentives for Qualifying

Illinois Data Centers

Illinois Public Act (P.A.) 101-0031 allows qualifying Illinois data centers to claim certain

tax incentives from Illinois sales and use tax and Illinois income tax. New and existing

data centers seeking these tax incentives must first apply to the Department of

Commerce and Economic Opportunity (DCEO).

Tax Credits

State of Illinois Incentives

City of Chicago Incentives

Federal

Incentives

Financial Tools That Are Available:

1.) Opportunity Zones

2.) HubZones

3.) Empowerment Zones

4.) New Market Tax Credit (NMTC)

Chicago Incentives

Program Description Type

Opportunity Zones Federal legislation designed to incentivize investors to convert unrealized capital

gains on investments into long-term investments in lower income areas.

Opportunity Zones are located across the country; Chicago has 135 qualified OZs

primarily on the South and West sides.

Capital Gains Tax

Deferral

HubZones The HUBZone program fuels small business growth in historically underutilized

business zones with a goal of awarding at least 3% of federal contract dollars to

HUBZone-certified companies each year.

Government

Preferential Contracting

Empowerment Zones The Empowerment Zone (EZ) program offers special financing and tax incentives

for qualified businesses in order to stimulate private investment and create jobs

within designated communities.

Tax Credits

New Market Tax Credit (NMTC) Provides below-market-rate equity or debt capital to qualifying businesses. A

qualifying business must meet several tests confirming that the majority of its

activities take place in, or that it serves primarily residents of, a Low-Income

Community.

Low Cost Financing

Federal Incentives

City of Chicago Incentives

Additional

Incentives

Financial Tools That Are Available:

1.) Line Extension Credits (Rider DE program)

2.) Solar Energy Rebates

3.) Energy Efficiency Incentives/Rebates

4.) Commercial and Industrial Program - Peoples Gas

5.) Small and Midsize Business Program - Peoples Gas

Chicago Incentives

Program Description Type

Line Extension Credits (Rider DE

Program)

ComEd offers credits against the costs of off-property line extensions needed for new

facilities equal to 5 years of the new expected delivery revenue which can represent

millions of dollars.

Cost Credit

Solar Energy Rebates ComEd offers rebates of $250/kW for the installation of onsite solar energy up to

$500,000 maximum.

Rebate

Energy Efficiency

Incentives/Rebates

ComEd offers an extensive portfolio of programs to help businesses meet

environmental and sustainability goals while lowering their consumption and costs.

There is a $2M cap per location per year.

Varies

Commercial and Industrial

Program - Peoples Gas

The Commercial and Industrial Program provides energy efficiency rebates, resources,

expert support and project management for customers. No matter your type of

operation, the program team can help your business reduce its energy use. Our team

can identify energy-saving opportunities customized for your business.

Rebate

Small and Midsize Business

Program - Peoples Gas

The Small and Midsize Business Program provides free energy-saving products,

assessments and rebates on energy upgrades. Reduce your operating costs and

reinvest those dollars back into your business.

Rebate

Additional Incentives