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Cook County Property Tax Incentives for New or Expanding Businesses

By Gary Smith
06/24/2021
Cook County Property Tax Incentives for New or Expanding Businesses

Chicago is providing a variety of incentives to businesses for relocating or expanding in Chicago, dependent on the size and location of the project and the number of jobs it creates.

What Incentives Are Available

The Tax Increment Financing, or TIF, program has been around for a long time, with many municipalities within the Chicago region designating specific areas as TIF Districts. TIF funds can be used to support land acquisition and site preparation, building rehabilitation, public improvements, interest subsidies, workforce training, and daycare facilities and their operation.

TIFs work by capturing the incremental increase in property value brought about by the improvement of a designated area and reinvests those revenues back into the area to assist with further development.

New Markets Tax Credits or NMTCs are also an available option. There is a financial assistance tool available through the Chicago Development Fund (CDF), which is a non-profit subsidiary of Chicago. CDF gets capital from investors, which then is used to make loans for qualified real estate projects with interest rates between 2 and 2.5 percentage points below market. In addition, the loan-to-value ratios could be as high as 95% of the development costs, and there is the potential for partial debt forgiveness after seven years. In return, the investors receive NMTCs, which are federal income tax credits that vary based on the size of the investment.

The CDF currently has three loan programs through the Chicago Department of Planning and Development, each geared toward a specific project time. These include expansion for existing industrial companies or developers of multi-tenant industrial facilities, grocery-anchored retail located in “food deserts”, and community facilities.

Enterprise Zones are another option. These are specific areas designated by either a municipality or the state to receive tax incentives and other benefits to stimulate economic activity and revitalization. Businesses located in one of these zones are eligible to receive a variety of incentives, including:

  • Investment Tax Credit and Jobs Tax Credit
  • Building Materials Sales Tax Exemption
  • Machinery and Equipment/Pollution Control Facilities Sales Tax Exemption
  • Exemption from the state tax on gas and electricity, as well as administrative charges
  • Exemption from real estate title transfer tax
  • Property tax reduction

Other opportunities for savings include the U.S. Empowerment Zone Program, Cook County Property Tax Incentives, Façade Rebate Program, Industrial Revenue Bonds, and Laboratories Facilities Fund.