Enterprise Zone Overview
Vandalia/Fayette County established its Illinois Enterprise Zone in March 1988, with a life of 20 years. That means that any project started prior to December 1998, will benefit for 10 full years of 100% property tax abatements for industrial projects and 3 full years of 100% property tax abatements for commercial projects. By the nature of the Enterprise Zone, any site in Vandalia/Fayette County can be amended into the Enterprise Zone for qualified manufacturing, warehousing and distribution projects.
Enterprise Zone Details
- 10- and 3-Year Property Tax Abatements -
The Vandalia/Fayette County Enterprise Zone has agreed to provide a ten (10) year abatement of 100% of all real estate taxes which normally would be assessed for eligible industrial projects and three (3) years for eligible commercial projects. Local tax abatements are valid for a 10-year period for industrial projects beginning with the tax year in which the new, increased assessment amount would be levied. The tax abatement incentive is available throughout the zone's boundaries. The abatement is offered by the county, participating municipal governments, local school districts and Kaskaskia College.
- 6.75% Sales Tax Exemption on Building Materials -
An exemption of the 6.75% state sales tax is available on the purchase of building materials to be incorporated into real estate within the boundaries of the Vandalia/Fayette County Enterprise Zone. This incentive is available for industrial projects involving either new construction or the rehabilitation/expansion of an existing facility. In order to qualify for the sales tax exemption on building material purchases, each of the following requirements must be met: 1) The building materials must be permanently affixed to the real estate within the enterprise zone for which the sales tax exemption is being sought (a Purchaser's Statement to this effect must be signed for the materials retailer/vendor by the purchaser at the time of the sale). 2) The building materials must be purchased through a legitimate, qualifying building materials retailer/distributor within Vandalia or unincorporated Fayette County.
- Illinois Income 0.5% Investment Tax Credit -
A stated investment tax credit of 0.5% is offered to taxpayers making investments in qualified property, including machinery, equipment and buildings. This credit is in addition to the regular 0.5% investment tax credit available by the State of Illinois.
- Local Building Permit Fee Waivers -
Building, electrical and plumbing permits are required for all projects, except in unincorporated areas of Vandalia/Fayette County. That involves new construction, substantial rehabilitation and expansion. However, within the Vandalia/Fayette County Enterprise Zone, the participating cities have waived the local fees normally associated with processing and issuance of the required permits.
- $500-Per-Job Tax Credit -
A business may receive a $500 Illinois income tax credit for each job created within the zone for which a certified economically disadvantaged or dislocated worker (as defined by the Job Training Partnership Act) is hired. In order to qualify for the credit, a minimum of five workers must be hired during the business' taxable year. The CEFS Economic Opportunity Corporation offers training programs for the economically disadvantaged under the federal Job Training Partnership Act.
- Interest Deduction -
Financial institutions are not taxed on the interest received on loans for development projects located within an enterprise zone, thereby indirectly assisting the developing business in its financing.
- Enterprise Zone Utility Tax Sales Tax Exemption -
For a business certified by the state as making an investment within the enterprise zone of $5 million or more and creating a minimum of 200 full-time equivalent jobs; or investing $40 million and retaining 2,000 or more full-time jobs, a 4% state sales tax exemption is available on all tangible personal property (e.g., selected machinery and equipment, raw materials, inventory, component parts, supplies, manufacturing fuels, etc.).
The tangible property must be used or consumed within the enterprise zone in the process of manufacturing or assembling goods for wholesale or retail sale.
- 5% Enterprise Zone Pollution Control Investment Sales Tax Exemption -
For a business which is certified by the state as making an investment within the enterprise zone of $5 million or more and creating a minimum of 200 full-time equivalent jobs; or investing $40 million and retaining 2,000 or more full-time jobs, a 5% state sales tax exemption is available on tangible personal property (e.g., machinery, equipment, supplies, etc.) used or consumed in the operation of pollution control facilities.