Section 520.1000  Definitions

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 Community Affairs.

"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 employee" means a person, employed by the taxpayer or any wholly-owned subsidiary of the taxpayer, who works a minimum of 35 hours per week for 52 weeks for a minimum total of 1,820 hours per year. Vacations, paid holidays, and sick time are included in this computation. Overtime is not considered a part of regular hours.

"Full-time equivalent job" means the number of employees required to equal one full-time employee.  For purposes of this definition, employee means a person who works a minimum of 35 hours per week for a minimum of 13 consecutive weeks to be counted toward full-time equivalency.

"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.

"Placed in service" means the state or condition of readiness and availability for a specifically assigned function as defined in 26 CFR 1.167(a)-11, Code of Federal Regulations Vol. 2, April 1, 2001.  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.

(Source:  Amended at 27 Ill. Reg. 3282, effective February 14, 2003)