Overview. The Illinois General Assembly last year enacted PA 97-905, which required for the first time that businesses located in Enterprise Zones file annual reports detailing the amount of Illinois tax benefits they derive from conducting business in an enterprise zone.  The original due date of first reports, for the calendar year 2012, is March 30, 2013.  The Illinois Department of Revenue recently announced that it was granting businesses an automatic 60 day extension for this first report. Businesses do not need to contact the Department to secure this extension.  They simply must file their first annual report by the May 29, 2013 extended due date.

Enterprise Zone Benefits. There are currently 95 Enterprise Zones in Illinois, the maximum number allowed by Illinois law. Tax benefits that businesses may derive from operating in an Enterprise Zone include: i) an exemption from sales tax on building materials; ii) an investment tax credit of .5 percent of qualified property; iii) a jobs tax credit for each job created in the zone for which a certified dislocated worker or economically disadvantaged individual is hired; iv) a 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; v) an exemption from the state utility tax on electricity and natural gas; and vi) real estate tax abatement and assessment reduction.

Illinois Department of Revenue Web Portal for Reports. Taxpayers may file their annual reports online. The web portal developed by the Illinois Department of Revenue to accommodate online filing is: http://www.revenue.state.il.us/Businesses/NewEnterpriseZoneReportingInformation.htm

Penalty for Failure to File Can Include Loss of Tax Benefits. Failure to file required annual reports can result in loss of eligibility for Enterprise Zone tax incentives.