Agencies
Services
Manufacturing Illinois Chips for Real Opportunity Act (MICRO)
In April 2022, Governor JB Pritzker and the General Assembly passed SB0157 (Public Act 0700), the Manufacturing Illinois Chips for Real Opportunity Act (MICRO). Four months later, President Joe Biden signed the 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, semiconductors, and quantum computers looking for their next U.S. manufacturing site.
Eligible applicants include existing or emerging Illinois manufacturers of quantum computers or quantum computing component parts, semiconductors or semiconductor component parts, microchips or microchip component parts, and businesses primarily engaged in research and development in the manufacturing of quantum computers, semiconductors, or microchips.
The MICRO program incentives are based on minimum capital investment and job creation commitments. Smaller projects can receive benefits under Tier I, while larger projects are eligible for expanded benefits under Tier II.
Tier I
To qualify for benefits under Tier I, companies are required to meet the following job and capital investment minimums within four years of executing an agreement:
- Capital investment minimum: $2.5 million
Job creation minimum: 50 full-time jobs or 10% of the worldwide headcount, whichever is less.
Tier II
To qualify for benefits under Tier II, the following jobs and capital investment thresholds must be met within five years in one of the following categories: microchip, semiconductor, or quantum computer manufacturer, or a manufacturer of related component parts, or a company focusing on research and development in the manufacturing process:
- $1.5B minimum investment:
- Qualifying activities: microchip, semiconductor, or quantum computer manufacturer, or a company focusing on research and development in the manufacturing process
- Job creation minimum: 500 jobs
- $300M minimum investment:
- Qualifying activities: microchip or quantum computer manufacturers of component parts, or companies focusing on research and development in the manufacturing of quantum computer, semiconductor, or microchip component parts. Job creation minimum: 150 jobs
- $100M minimum investment:
- Qualifying activities: Manufacturers in Illinois converting an existing traditional manufacturing facility to manufacturing, research and development, or component parts manufacturing of microchips, semiconductors, or quantum computers.
- Job creation minimum: 75 new jobs (or new jobs equivalent to 10% of statewide employment baseline for taxpayer, whichever is less)
Job Creation and Retention Benefits
All Tiers
- 100% of withholding taxes for new jobs created or retained jobs (Projects located in underserved*/ energy transition** areas only)
- 75% of withholding for new jobs created or retained jobs (all other locations)
These tax credits may be claimed immediately by retaining payroll withholding, equivalent to the credit amount, instead of remitting to the Illinois Department of Revenue.
Credit Duration
The length of the credit is dependent on the size of the project:
- 10 years for Tier I projects with the opportunity for one renewal
- 15 years for Tier II projects with the opportunity for one renewal
*Underserved area: any geographic area as defined in Section 5-5 of the Economic Development for a Growing Economy Tax Credit Act.
**Energy Transition Area: a county with less than 100,000 people or a municipality containing a fossil fuel plant or coal mine that has retired or will retire or significantly reduced or will significantly reduce service, from service or significantly reduced service within 6 years before or after an application.
Credits for Training Costs: All Tiers
All projects are eligible for a credit equivalent to 10% of the training costs of new employees.
Illinois Education Bonus: Training credits can be increased by an additional 15% of training costs for new employees who are recent graduates, certificate holders, or credential recipients from four-year public and private universities, community colleges, vocational/technical schools, Clean Jobs Workforce Network Program, and USDOL-certified apprenticeship programs in Illinois.
Maximum training benefits will not exceed 25% of training costs.
Investment Credit: All Tiers
All MICRO projects receive an investment credit on qualified property (0.5%) for use in the year the property was placed in service or reaches their jobs and investment threshold.
Credit for Construction Jobs: All Tiers
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.
Tier II: Additional Tax Exemptions
Tier II projects receive additional benefits including an exemption on retailers’ occupation tax paid on building materials (five years); an exemption on state utility tax for electricity and natural gas (up to 30 years); and an exemption on telecommunication excise tax and waiver of the ICC administrative charge.
Manufacturing Illinois Chips for Real Opportunity (MICRO) Act Agreements
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.