Illinois Administrative Code › Title 14 - COMMERCE › Part 520 - ENTERPRISE ZONE AND HIGH IMPACT BUSINESS PROGRAMS › Subpart J - MACHINERY AND EQUIPMENT/POLLUTION CONTROL FACILITIES SALES TAX EXEMPTION › Section 520.1000 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
The following definitions are applicable to Subpart J.
"Act" means Sections 1d-1f of the Retailers' Occupation Tax
				  Act [35 ILCS 120/1d-1f ].
"Department" means the Department of Commerce and Economic
				  Opportunity.
"Eligible investment" means:
Investments in qualified property that are placed in service
				  in an Enterprise Zone or by a designated High Impact Business in Illinois.
				  Qualified properties are statutorily defined in Section 201(f) and (h) of the
				  Illinois Income Tax Act [35 ILCS
				  5/201(f) and (h) ]; and
Noncapital/nonroutine investments, and associated service
				  costs (direct labor or contractual fees), placed in service in an Enterprise
				  Zone and made for the improvement or renovation of qualified properties. These
				  activities are undertaken for the purposes of improving productive capacity,
				  efficiency, product quality, or competitive position. The investments cannot be
				  repetitious, commonplace, or associated with regular maintenance expenditures,
				  and would include, for example, rebuilt cast house furnaces, rebuilt soaking
				  furnaces, a rebuilt hot line control system, a restructured plant layout, and
				  installed equipment to rebuild a logeman baler. Noncapital/nonroutine
				  investments are those that do not qualify for the investment tax credit
				  pursuant to Section 201(f) of the Illinois Income Tax Act.
Businesses utilizing this definition must provide detailed
				  information regarding the purpose, scope, justification, and benefits of these
				  noncapital/nonroutine investments, including defined project start and
				  completion target dates, and a level of expenditures of at least
				  $40,000.
"Full-time equivalent job" means a job in which the new
				  employee works for the recipient or for a corporation under contract to the
				  recipient at a rate of at least 35 hours per week. A recipient who employs
				  labor or services at a specific site or facility under contract with another
				  may declare one full-time, permanent job for every 1,820 man hours worked per
				  year under that contract. Vacations, paid holidays, and sick time are included
				  in this computation. Overtime is not considered a part of regular hours.
				  [20 ILCS
				  655/3(i) ]
"Full-time retained job" means any employee defined as having
				  a full-time or full-time equivalent job preserved at a specific facility or
				  site, the continuance of which is threatened by a specific and demonstrable
				  threat, which shall be specified in the application for development assistance.
				  A recipient who employs labor or services at a specific site or facility under
				  contract with another may declare one retained employee per year for every
				  1,750 man hours worked per year under that contract, even if different
				  individuals perform on-site labor or services. [20 ILCS
				  655/3(j) ]
"High Impact Business" means a business that is designated as
				  a High Impact Business by the Department pursuant to the provisions of Section
				  5.5 of the Illinois Enterprise Zone Act [20 ILCS
				  655/5.5 ].
"Job creation" means at least 200 full-time equivalent
				  employees have been hired over the number of full-time equivalent employees
				  that were employed by the applicant as of September 25, 1985 or the date the
				  Enterprise Zone was certified, whichever is later. Job titles being filled or
				  refilled as a result of strikes or layoffs or replacement workers to replace
				  company locked out employees cannot be counted as job creation. A majority of
				  the "jobs created" must be made in the Enterprise Zone in which the eligible
				  investment is made.
"Job retention" means:
At least 2,000 full-time employees, a majority of whom are
				  located in the Enterprise Zone in which the eligible investment is made, will
				  remain employed in Illinois as a direct result of the eligible investment, and
				  would have lost their jobs had the investment not been made. The number
				  originally retained in the Enterprise Zone must be retained for the duration of
				  the exemption; or
At least 90% of the full-time jobs in place in the Enterprise
				  Zone on the date on which the exemption is granted will remain in place in the
				  Enterprise Zone for the duration of the exemption. If the business utilizes
				  full-time jobs retained at Illinois facilities outside of the Enterprise Zone
				  to qualify for this exemption, 90% of the total full-time jobs must also be
				  retained for the duration of the exemption.
"Minimum investment" means the amount of eligible investment
				  that must be made to qualify for the exemption. Under the job creation
				  criteria
,
the minimum eligible investment that must be
				  made in an Enterprise Zone is $5 million. Under the job retention criteria, the
				  minimum eligible investment that must be made in an Enterprise Zone is $40
				  million.
"New employee" means a full-time equivalent job that
				  represents a net increase in the number of the recipient's employees statewide.
				  "New employee" includes an employee who previously filled a new employee
				  position with the recipient who was rehired or called back from a layoff that
				  occurs during or following the base years. The term "new employee" does not
				  include any of the following:
An employee of the recipient who performs a job that was
				  previously performed by another employee in this State, if that job existed in
				  this State for at least 6 months before hiring the employee;
Any individual who has a direct or indirect ownership
				  interest of at least 5% in the profits, capital or value of any member of the
				  recipient;
A child, grandchild, parent or spouse, other than a spouse
				  who is legally separated from the individual, of any individual who has a
				  direct or indirect ownership interest of at least 5% in the profits, capital or
				  value of any member of the recipient;
Employee positions being filled or refilled as a result of
				  strikes or layoffs or replacement workers to replace recipient company locked
				  out employees.
"Placed in service" means the state or condition of readiness
				  and availability for a specifically assigned function as defined in 26 CFR 1.46
				  - 3(d) (July 1, 2012). An eligible investment in qualified property as defined
				  in Section 201(f) of the Illinois Income Tax Act shall be considered placed in
				  service on the earlier of:
The date the property is placed in a condition of readiness
				  and availability for use; or
The date on which the depreciation period of that property
				  begins. Eligible noncapital/nonroutine investments shall be considered placed
				  in service if 80% of the allocated monies have been expended.