New Business Legislation in Iowa and Illinois

At the beginning of this year, new business legislation went into effect in Iowa and Illinois. Here's the latest laws benefiting companies in these states.

Iowa

Corporate Tax Reform

At the beginning of the year, Iowa corporations began experiencing the effects of an extensive tax cut package signed into law by Gov. Kim Reynolds in 2022.

• The law effectively consolidated Iowa’s three-bracket corporate income tax into a two-bracket tax, with the highest corporate tax rate dropping from 9.8% to 8.4%.
• According to the law, following each year in which the State brings in at least $700 million in net corporate tax receipts, that surplus will be utilized to decrease the highest corporate tax rate until it hits 5.5%.

Illinois

Earlier this year, Illinois expanded business incentives to attract and retain companies hoping to expand or locate their business in the state. 

Invest in Illinois Fund

• The new $400 million Invest in Illinois closing fund offers cash assistance to high-priority projects that commit to investing and creating jobs. This means that relocating or expanding companies can receive financial assistance to help with capital expenditures connected to their projects. The fund allocation process is deemed to be simple in order to help significant deals close easily.

Economic Development for a Growing Economy Program (EDGE):

• The EDGE tax credit provides annual corporate tax credits to qualifying businesses to help create jobs, investment and training programs in Illinois.
• New in 2023:
  • The administrative burden of requiring companies to provide an out-of-state option has been removed.
  • The tax benefits have been doubled from 25% to 50% for companies that retain employees in underserved areas.

Reimagining Energy and Vehicles Program (REV):

• The REV program provides manufacturers of electric vehicles, EV component parts and EV power supply equipment manufacturers with incentives for qualifying manufacturers.
• New in 2023:
  • The program is now eligible to smaller EV companies, with the minimum required capital investment being reduced from $20 million to $2.5 million.
  • Newly eligible companies include manufacturers of renewables, solar and energy storage components.
  • The tax credits for companies retaining jobs in underserved areas increased from 50% to 100%, and increased from 25% to 75% for companies retaining jobs in other areas. 

Manufacturing Illinois Chips for Real Opportunity Act (MICRO):

• The MICRO Act provides incentives for manufacturers of microchips and semiconductors as well as component parts manufacturers, as demand in this high-tech sector rises. 
• New in 2023: the value of tax credits for retained jobs increased from 50% to 100% for underserved areas, and increased from 25% to 75% for other areas. 

High Impact Businesses Program (HIB):

• The HIB program supports business projects that make investments of at least $12 million and create 500 full-time jobs or invest $20 million and retain 1,500 full-time jobs. 

• New in 2023: companies no longer have to complete an arduous process to show that they wouldn't have located or expanded in Illinois if it weren't for the HIB credit. Companies now only have to submit an attestation.

Illinois Enterprise Zone Program:

• The Illinois Enterprise Zone Program stimulates economic growth and neighborhood revitalization in economically depressed areas of Illinois through state and local tax incentives, regulatory relief and improved governmental services. 

• New in 2023: the maximum size of existing enterprise zones has been increased to make communities more competitive.