Nov. 18, 2021
Illinois enacted the Reimagining Electric Vehicles in Illinois Act to provide incentives for electric vehicle (EV) manufacturing and production. Among other tax provisions, the Act includes the following:
- a sales and use tax exemption for building materials, and
- a provision allowing local jurisdictions to abate property taxes for certain REV Illinois Project facilities.
As part of the Act, the Reimagining Electric Vehicles in Illinois (REV Illinois) Program is established and will be administered by the Department of Commerce and Economic Opportunity. The program will provide financial incentives to eligible manufacturers of electric vehicles, electric vehicle component parts, and electric vehicle power supply equipment. Any taxpayer planning a project to be located in Illinois may request consideration for designation of its project as a REV Illinois Project, by formal written letter of request or by formal application to the Department, in which the applicant states its intent to make at least a specified level of investment and intends to hire a specified number of full-time employees at a designated location in Illinois.
Building Materials Sales And Use Tax Exemption For REV Illinois Project Sites
Each retailer who makes a sale of building materials that will be incorporated into real estate in an electric vehicle manufacturing facility, an electric vehicle component parts manufacturing facility, or an electric vehicle power supply manufacturing facility REV Illinois Project that meets the qualifications in this Act for which a certificate of exemption has been issued by the Department of Commerce and Economic Opportunity, may deduct receipts from such sales when calculating any state or local use and occupation taxes.
REV Illinois Building Materials Exemption Certificate. In addition to any other requirements to document the exemption, the retailer must obtain the purchaser’s REV Illinois Building Materials Exemption certificate number. A construction contractor or other entity must not make tax-free purchases unless it has an active REV Illinois Building Materials Exemption Certificate issued by the Department at the time of purchase.
Upon request from the electric vehicle manufacturer, electric vehicle component parts manufacturer, or electric vehicle power supply manufacturer certified by the Department of Commerce and Economic Opportunity under the REV Illinois Act, the Department must issue a REV Illinois Building Materials Exemption Certificate for each construction contractor or other entity identified by the certified electric vehicle manufacturer, electric vehicle component parts manufacturer, or electric vehicle power supply manufacturer. The Department must make the REV Illinois Building Materials Exemption Certificates available to each construction contractor or other entity and the certified electric vehicle manufacturer, electric vehicle component parts manufacturer, or electric vehicle power supply manufacturer. The request for REV Illinois Building Materials Exemption Certificates from the certified electric vehicle manufacturer, electric vehicle component parts manufacturer, or electric vehicle power supply manufacturer to the Department must include the following information:
- the name and address of the construction contractor or other entity;
- the name and location or address of the building project site;
- the estimated amount of the exemption for each construction contractor or other entity for which a request for a REV Illinois Building Materials Exemption Certificate is made, based on a stated estimated average tax rate and the percentage of the contract that consists of materials;
- the period of time over which supplies for the project are expected to be purchased; and
- other reasonable information as the Department may require, including but not limited to FEIN numbers, to determine if the contractor or other entity, or any partner, or a corporate officer, and in the case of a limited liability company, any manager or member, of the construction contractor or other entity, is or has been the owner, a partner, a corporate officer, and in the case of a limited liability company, a manager or member, of a person that is in default for moneys due to the Department.
The REV Illinois Building Materials Exemption Certificate must contain an expiration date, which cannot be more than five years after the date of issuance.
Property Tax Abatement For Certain REV Illinois Project Facilities
Any taxing district, upon a majority vote of its governing body, may, after determination of the assessed value, abate any portion of real property taxes otherwise levied or extended by the taxing district on a REV Illinois Project facility owned by an electric vehicle manufacturer, electric vehicle component parts manufacturer, or an electric vehicle power supply manufacturer that is subject to an agreement with the Department of Commerce and Economic Opportunity under the Act. The abatement would apply during the period of time such agreement is in effect as specified by the Department of Commerce and Economic Opportunity.
P.A. 102-0669 (H.B. 1769),Laws 2021, effective November 16, 2021
Learn more about Reimagining Electric Vehicles in Illinois Act by scheduling a call with Ashmore Consulting.
The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ashmore Consulting LLC to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact Ashmore Consulting LLC or other tax professional prior to taking any action based upon this information. Ashmore Consulting LLC assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.