A wide range of financial incentives are available to businesses that expand or locate in the Jackson County – Murphysboro - Carbondale Enterprise Zone. The Enterprise Zone was jointly created by the City of Murphysboro, the City of Carbondale, Jackson County and the State of Illinois.
Enterprise Zone Incentives
1. Abatement of Property Tax on New Improvements
Property taxes on real estate improvements that raise a commercial, industrial or manufacturing property’s fair market value by more than $10,000 is abated after project completion at the following schedule:
- 100% of property tax on the new improvement is abated for the first five (5) years
- 50% of property tax on the improvement is abated for the second five (5) years
2. Deduction of Sales Tax for Building Materials
100 % of sales tax on materials used for construction or renovation of buildings in the Enterprise Zone can be deducted at the time of purchase. This provision applies to commercial or industrial construction.
The sales tax deduction applies to items that are permanently affixed to real property, such as lumber, mortar, glued-down carpets, paint, wallpaper and similar affixed items. As a rule of thumb, sales tax on any building materials that would remain with the property if the property were sold is eligible for the deduction.
The deduction does not apply to materials purchased for routine maintenance, repair or upkeep of the property.
The sales tax deduction includes both the local and state portion of sales tax. Any retailer who pays Illinois sales tax can deduct the sales tax, so long as the purchaser provides the retailer with a Certificate of Eligibility for Sales Tax Exemption, which is issued by the City’s building inspector.
3. Waiver of Building Permit Fees
City building permit fees on any renovation, expansion or new construction project within the Enterprise Zone are waived. This waiver of fees applies to building, plumbing, electrical, demolition, site plan and zoning certificate fees for permits issued for rehabilitation, expansion or new construction.
Fees charged for permits issued for normal repair or replacement of electrical, plumbing or mechanical systems are not waived. Filing fees for rezoning or special use applications are not waived.
4. State of Illinois Tax Incentives
There are a number of state tax incentives for investment in an Illinois enterprise zone. These incentives are related to income, utility, and sales taxes. The programs are listed below. Detailed information on each program is available from Jackson Growth Alliance, the City of Carbondale, Greater Egypt Regional Planning Commission or the Illinois Department of Commerce and Economic Opportunity (see contacts listed below).
- Enterprise Zone Investment Tax Credit
- Jobs Tax Credit
- Dividend Deduction
- Corporate Contribution Deductions
- Income Tax Deduction for Financial Institutions
- Manufacturing Machinery and Equipment Sales Tax Exemption
- State Utility Tax Exemption
Enterprise Zone Questions & Answers
Q. Do I have to apply for Enterprise Zone benefits?
A. To take advantage of the benefits, an owner or developer of property within the Enterprise Zone must simply obtain a building permit (the fee for which is waived) and a “certificate of eligibility” from the City of Carbondale, City of Murphysboro or Jackson County Government depending upon the project’s location.
Q. Can the boundaries of the Zone be changed to include my property?
A. There are detailed procedures to amend the boundaries of the Enterprise Zone. The Zone may be extended to incorporate a property if a specific improvement to the property is being considered.
Q. When does the Enterprise Zone expire?
A. The Enterprise Zone expires in 2020.
Tax Increment Financing District
A Tax Increment Financing (TIF) District helps municipal governments stimulate redevelopment in a designated area. Using this financing tool, the local governments can reimburse developers for certain expenses using the property tax revenue that new developments in the TIF district generate.
Expenses eligible for reimbursements include: architectural, engineering, legal, environmental, financial, planning, and other services; property assembly costs, including acquisition of land, demolition of buildings and site preparation; costs of rehabilitation, reconstruction or repair or remodeling of existing buildings, fixtures and leasehold improvements; cost of financing during construction; and a portion of the interest cost incurred by a developer related to the construction, renovation or rehabilitation of a redevelopment project. Reimbursements are approved through a redevelopment agreement.
The City of Carbondale created three TIF Districts.For additional information about these TIF Districts, visit Carbondale TIF Program.