Manufacturing Illinois Chips for Real Opportunity Act (MICRO)
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In April 2022, Governor JB Pritzker and the General Assembly passed SB3917, the Manufacturing Illinois Chips for Real Opportunity Act (MICRO). Four months later, President Joe Biden signed federal Creating Helpful Incentives to Produce Semiconductors (CHIPS) legislation into law. These stacked incentives, coupled with Illinois’ existing tech and innovation workforce, make Illinois a very welcoming and strategic location for manufacturers of microchips and semiconductors looking for their next U.S. manufacturing site.
Eligible companies manufacture microchips and semiconductors and associated component parts. Job creation incentives can be awarded as of January 1, 2023 and claimed beginning January 1, 2025.
Larger projects should meet the following jobs and capital investment thresholds within five years in order to receive benefits:
- Microchip and semiconductor Manufacturer: $1.5B capital investment & ≥ 500 jobs
- Microchip and semiconductor Component Parts Manufacturer: $300M capital investment & ≥ 150 jobs
- Manufacturers converting existing manufacturing facility to microchips and semiconductors components manufacturing: ≥ 75 new jobs (or new jobs equivalent to 10% of statewide baseline for taxpayer, whichever is less) & $100M capital investment
Smaller projects may receive benefits if the company invests more than $20M in capital and creates 50 new jobs within four years.
Job Creation and Retention Benefits
These tax credits may be claimed immediately by retaining funds from withholding, equivalent to the credit amount, instead of remitting to the Illinois Department of Revenue.
Benefits are increased by projects locating in underserved or energy transition areas:
- 100% of withholding for new jobs created, and
- 50% of withholding for retained employees.
The regular benefit is 75% of income tax withholdings attributable to new employees and 25% attribute to Retained Employees once the new jobs threshold is met.
The length of the credit is dependent on the size of the project:
- 15 years for larger projects
- 10 years for smaller projects
Credits for Training Costs
All projects are eligible for a credit up to 25% of eligible training costs for new employees, with the baseline being 10% of training costs for all projects.
An additional 15% for trainees is available for project that hire recent Illinois graduates, certificate holders or credential recipients from 4-year public and private universities, community colleges, vocational/technical schools, Clean Jobs Workforce Network Program, and USDOL certified apprenticeship programs.
All projects are eligible for a credit up to 10% of training costs to upskill retained employees.
All MICRO projects receive an investment credit on qualified property (0.5%) for use in the year the property was put in service.
Tax Exemptions for Larger Projects
Larger projects receive additional benefits including an exemption on retailers’ occupation tax paid on building materials (5 years); an exemption on state utility tax for electricity and natural gas (10 years); an exemption on telecommunication excise tax and waiver of the ICC administrative charge.
Credit for Construction Jobs
A MICRO benefit that mirrors the Blue Collar Jobs Act benefits is a tax credit against Corporate Income Tax liability for projects with a Project Labor Agreement in an amount equal to:
- 50% of the amount of the incremental income tax attributable to the construction wages paid in connection with construction of the project facilities as a jobs credit for workers hired to construct the project.
- 75% if project in underserved area or energy transition area.
Review the MICRO application.
For more information about this program, please contact CEO.MICRO@illinois.gov in the Office of Business Development so we may start assessing the benefits for your project.