Enterprise Zone

Galesburg’s Enterprise Zone, initially certified for 20 years in July 1984, has an emphasis on commercial and industrial development and diversification. The State has approved a ten-year extension that expires on June 30, 2014. Originally designated at 1.5 square miles, the zone has been expanded several times and further annexation could be considered for qualified business and sites on the basis of the number of jobs created and property and/or sales taxes generated. Enterprise Zone benefits are available for new businesses desiring to locate in Galesburg, as well as existing businesses within the zone desiring to expand their operations.

Much of the area now designated is zoned M-2, heavy industrial, although some of the designated area has other zoning such as B-2 and B-3, commercial; and R-3, multi-family. More than 90 businesses, ranging from manufacturing and warehouse operations to small service providers and retailers, are located in the enterprise zone.

State Incentives for Enterprize Zones

The Illinois Enterprise Zone Program offers numerous state incentives to encourage companies to locate or expand in enterprise zones. Currently, the following incentives are available:

Tax Exemptions

Enterprise Zone Machinery and Equipment/Pollution Control Facilities-Sales Tax Exemption State sales tax exemption is available on purchases of tangible personal property to be used or consumed in the manufacturing or assembly process, or in the operation of a pollution control facility within the enterprise zone. Eligibility for this exemption is contingent upon a business making an investment, which either creates a minimum of 200 full-time equivalent jobs in Illinois, retains a minimum of 2,000 full-time jobs in Illinois, or makes an eligible investment of $40,000,000 that results in the retention of at least 90% of the full-time jobs in place on the date the exemption is granted.

Enterprise Zone Utility Tax Exemption – A state utility tax exemption on gas, electricity, and the Illinois Commerce Commission’s administrative charge is available to businesses located in the enterprise zone. The exemption is contingent on the business being located within an Enterprise Zone and making a $5 million investment which creates a minimum of 20 full-time equivalent jobs or an investment of $175 million which creates a minimum of 150 new full-time equivalent jobs or an investment of $20 million which retains a minimum of 1,000 jobs.

Tax Credits

Enterprise Zone Investment Tax Credit – A state investment tax credit of .5 percent is allowed a taxpayer who invests in qualified property in the enterprise zone. Qualified property includes machinery, equipment and buildings. The credit may be carried forward up to five years. This credit is in addition to the regular .5 percent investment tax credit for taxpayers that increase their employment in Illinois by one percent over the preceding year.

Illinois State Income Tax Deduction

Dividend Income Deduction – Individuals, corporations, trusts and estates are not taxed on dividend income from corporations doing substantially all of their business in the zone.
Interest Deduction – Financial institutions are not taxed on the interest received on loans for development within the enterprise zone.

Galesburg Incentives

The 7-1/4 percent state administered sales tax will be deducted on all construction materials purchased within the City and used on a construction project in the enterprise zone.
Galesburg and all local taxing districts will fully abate any increase in real estate taxes, resulting from the project, up to $1 million for a ten-year period, on property improvements, provided that the improvements create new jobs and that the abatement does not reduce the prior assessed value.

The City of Galesburg will waive all building permit fees, water service tap fees and street and terrace opening fees for businesses locating in the enterprise zone.

The City of Galesburg will assist businesses locating in the zone to identify and apply for appropriate state and federal grants and loans.

Under Galesburg’s Economic Incentive Policy, some projects that meet specific criteria may qualify for additional incentives, including low interest loans.

City of Galesburg Enterprise Zone (PDF)

Contact:
Roy Parkin, Director of Community Development
City of Galesburg
55 Tompkins Street
Galesburg, IL 61401
(309) 345-5704