McLean County/Bloomington-Normal Enterprise Zone:

Criteria for Expansion

The Enterprise Zone (EZ) was established in 1984 by joint agreement by the City of Bloomington, Town of Normal and McLean County to help provide additional incentives to the new Mitsubishi plant being located in the area. The EZ is a creation of the State of Illinois and because of that we can only offer the incentives outlined in the State Enabling Ordinance. Expansion of the EZ is also dictated by State statute, and it allows expansion by two methods: Option 1, which is for single purpose projects, or Option 2, expanding the EZ through the original poverty criteria.

Any expansion of the EZ will be considered only if the project meets two of the three following criteria:

1. The project must create or retain 100 full-time equivalent primary wage jobs within 12 months of the project approval. Primary wage jobs are defined by jobs paying 50 percent of the median family income for the community.
2. The value of real property in the project must be at least $10 million, excluding land and soft costs as well as fixtures, furniture and equipment.
3. The project must generate tax revenue of $100,000. This can be sales tax or property tax or a total based upon the combination of both.

Once this criteria is met, the potential applicant must show the EZ Administrator that a building or site in the current boundaries of the EZ is not suitable due to one or more of the following conditions:

1. Inadequate utilities to meet the needs of the project
2. Inadequate transportation or rail facilities or access to a site
3. Inability to acquire property at a cost suitable to the project owners

Any expansion of the EZ must meet current long-range land use planning requirements and/or be consistent with the existing zoning classification.

Enterprise Zone Benefits:

• Sales Tax Exemption

An exemption of the sales tax (Retailers Occupation Tax) is offered for the building materials which will be incorporated into real estate within the Enterprise Zone.

The sales tax exemption is limited to the property for which a building permit is required and has been stamped with the Enterprise Zone seal. Purchases must be made from retailers who are in the State of Illinois.

• Income Tax Deductions

Individuals, corporations, trusts and estates are not taxed on dividend income derived from corporations doing substantially all their business in a zone or zones. Financial institutions are not taxed on the interest received on loans for development within an Enterprise Zone. Businesses may deduct from taxable income double the value of a cash or in-kind contribution to an approved project of the designated zone organization.

• Tax Credits

A state investment tax credit of .5 percent is allowed a taxpayer who invests in qualified property in a zone. This is in addition to the regular .5 percent investment tax credit available throughout the state.

The Enterprise Zone Job Tax Credit allows a business a $500 corporate tax credit for each job created in the zone for which a dislocated worker is hired. A minimum of five workers must be hired to qualify for the credit.

• Financing

Business financing is available in the Enterprise Zones. The Illinois Development Finance Authority has set aside $100 million of its bonding authority for exclusive use in zones.

All other federal and state business financing programs are available for operations located in Enterprise Zones.

For additional information, contact the Zone Administrator:

Marty Vanags, CEO

Economic Development Council of the Bloomington-Normal Area

(309) 661-6332

mvanags@bnbiz.org