What is the Illinois High Impact Business Investment Credit?

High Impact Business Investment (Credit Code 5220) 35 ILCS 5/201(h)

“Qualified property” is property that • is tangible; • is depreciable according to Internal Revenue Code (IRC) Section 167;

• has a useful life of four or more years as of the date placed in service in Illinois; and

• is acquired by purchase as defined in IRC Section 179(d).

Qualified property can be new or used but does not qualify for the High Impact Business Investment Credit if it was previously used in Illinois in a manner that qualified for that credit or for the Replacement Tax Investment Credit on Form IL-477, Replacement Tax Investment Credits. Qualified property includes buildings, structural components of buildings, and signs that are real property. It does not include land or improvements to real property that are not a structural component of a building, such as landscaping, sewer lines, local access roads, fencing, parking lots, and other appurtenances.

Any improvement or addition made on or after the date the enterprise zone or river edge redevelopment zone was designated, or on or after the date the business was designated as a high impact business, is considered to be qualified property to the extent that the improvement or addition increases the adjusted basis of the property previously placed in service in Illinois and otherwise meets the requirements of qualified property.

For tax years ending on or after December 31, 1987, you may take this credit if

• your business has been designated as a high impact business,

• you placed qualified property in service on or after the date the business was designated as a high impact business and on or before the last day of your current tax year, and

• you continued to use the qualified property on the last day of your tax year.

You may not take this credit

• if the property is eligible for the Enterprise Zone Investment credit.

• until the minimum investments in qualified property required under Section 5.5 of the Illinois Enterprise Zone Act have been satisfied.

You should take the credit applicable to the minimum investments in the tax year in which the minimum investments were completed. Credit for additional investments (beyond the minimum investments) is available only in the year the qualified property is placed in service.

Using the worksheet on the next page and these instructions, figure your High Impact Business Investment credit to enter in Column E of your Schedule 1299-I.