Sales Tax Exemption on Building Materials

Sales tax exemption on building materials used for building or remodeling projects in the Enterprise Zone are exempt from sales tax with a Building Materials Exemption Certificate (BMEC) issued from the Illinois Department of Revenue (IDOR). Materials must be permanently affixed to the property and must be purchased from a qualified retailer prior to the start of the project’s construction.

A BMEC is applied for through the enterprise zone administrator, of the zone where the property is located. A project application will be approved by the zone administrator and each contractor &/or owner (who will be purchasing materials for the project) will apply for a separate BMEC which will arrive by email from the IDOR.

Download the BMEC Form

There is a 0.5% fee based on the total of building materials cost for renovation and new construction not to exceed $50,000.

Sales tax in some communities vary. Please check with the Zone Administrator for your local tax rate.

Property Tax Abatement on New Improvements 

New construction and/or remodeling on a property located in the Enterprise Zone may eligible for real estate tax abatements, for up to (5) five years, as long as the property is not also located in a TIF District.

Abatements vary, not all taxing bodies in the zone abate. The Enterprise Zone Administrator will provide an estimate upon request.

Project Application Instructions

Application forms must be completed by applicant and then certified by the Whiteside Carroll Enterprise Zone Administrator and Building Materials Exemption Certificates (BMEC) issued by Illinois Department of Revenue before you are eligible for sales tax exemption. Each contractor who is providing materials must provide and or complete the Building Materials Exemption Certificate Application form. Do not order or purchase building materials before your BMEC's are issued.

Information and Items Needed to Complete Applications

1. Approved building permit
2. Enterprise Zone Project Application
   1. "Estimated Start Date of Project" will be filled in by the zone administrator on the day your project is approved. Please leave this blank.
   2. NAICS Number: May be obtained from: http://www.naics.com/search.htm or your tax preparer
   3. Enterprise Zone Fee (Cost of Building Materials (#3) X .005(1/2 %) not to exceed $50,000
3. Building Material Exemption Certificate (BMEC) Application(s). (One is needed for each contractor who will be purchasing or ordering materials for your project, for their portion of your project)
4. Once all applications have been approved by the Enterprise Zone Administrator, the IDOR will
   issue, by email, all BMEC's so that you and your contractors may begin to purchase and/or order
   building materials for your project.

Reporting Requirements

Contractors

Contractors who hold a Building Materials Exemption Certificate (BMEC) for a project must complete a BMEC report for each year the BMEC was active/valid, even if they did not purchase materials for the last year the certificate was active/valid.

Project Owners

Project owners must complete a “Close Project Report” to the Zone Administrator upon completion of their project and a “Business Report” to the IDOR for each year of real estate tax abatement received.

Deadline to file reports is typically May 31st of each year at http://www.revenue.state.il.us/Businesses/Incentives/

Downloads:

Building Materials Exemption Certificate - BMEC Form

Project Application Form

Tax Incentive Information

Enterprise Zone Maps