City of Pekin, IL

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Enterprise Zone

Enterprise Zone Information

The Illinois Enterprise Zone Program is designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state through state and local tax incentives, regulatory relief, and improved governmental services.

A wide range of financial incentives are available to businesses that expand or locate in the Southern Tazewell Enterprise Zone. Pekin’s Enterprise Zone is part of a broader zone jointly created by the City of East Peoria, Village of Morton, the Village of Tremont, Tazewell County, and the Illinois Department of Commerce and Economic Opportunity in 2016. The Southern Tazewell Enterprise Zone is shown on the map linked below.

Enterprise Zone Project Application
Enterprise Zone Map

Enterprise Zone Benefits

1. Abatement of Property Tax on New Improvements
Property tax on improvements that raise a commercial, industrial or manufacturing property’s assessed value is abated at 100% of property tax on the new improvement for the first five (5) years after project completion.

The property tax abatement provisions do not exempt owners of property in the Enterprise Zone from property tax altogether. Rather, the program abates property tax only on new improvements. NOTE: properties also located in a tax increment financing (TIF) district are not eligible for this benefit but may be eligible for similar benefits through the TIF program.


2. Deduction of Sales Tax for Building Materials
100% of sales tax on materials used for construction or renovation of buildings in the Enterprise Zone can be deducted at the time of purchase. This provision applies to commercial or industrial construction. As a rule of thumb, sales tax on any building materials that would remain with the property if the property were sold is eligible for the deduction. The deduction applies to items that are permanently affixed to real property, such as lumber, mortar, glued-down carpets, paint, wallpaper and similar affixed items.  The deduction does not apply to materials purchased for routine maintenance or repair. The sales tax deduction includes both the local and state portion of sales tax. Any retailer who pays Illinois sales tax can deduct the sales tax, so long as the purchaser provides the retailer with a Certificate of Eligibility for Sales Tax Exemption, which is issued by the City.

3. State of Illinois Tax Incentives
There are a number of state tax incentives for investment in an Illinois enterprise zone. These incentives are related to income, utility, and sales taxes. The programs are listed below. Detailed information on each program is available from the City of Pekin, Greater Peoria Economic Development Corporation or the Illinois Department of Commerce and Economic Opportunity (see contacts listed below).

  •         Enterprise Zone Investment Tax Credit
  •         Corporate Contribution Deductions
  •         Income Tax Deduction for Financial Institutions
  •         Manufacturing Machinery and Equipment Sales Tax Exemption
  •         State Utility Tax Exemption

Enterprise Zone Questions and Answers

Q. Do I have to apply for Enterprise Zone benefits?

A. To take advantage of the benefits, an owner or developer of property within the Enterprise Zone must simply obtain a building permit and a “certificate of eligibility” from the City of Pekin’s Economic Development Department.

Q. Can the boundaries of the Zone be changed to include my property?

A. There are detailed procedures to amend the boundaries of the Enterprise Zone. The Zone may be extended to incorporate a property if a specific improvement to the property is being considered. This is a process involving approval from the State of Illinois, so it may take time for any extension of the Enterprise Zone to be completed. Contact the City of Pekin or for detailed information.

Questions?

Josh Wray
Director of Economic Development
111 S. Capitol Street
Pekin, Illinois 61554
309-478-5355
JLWray@ci.pekin.il.us