Illinois Manufacturer’s Purchase Credit- June 30 Deadline
SALT Alert , June 2006

The Illinois Manufacturer’s Purchase Credit ("MPC") is a significant sales tax credit available to all Illinois manufacturing and graphic arts companies that purchase manufacturing or graphic arts machinery and equipment. The MPC can be applied against the sales tax or use tax on future purchases of “production related tangible personal property” by a manufacturer, graphic arts producer, or lessor who rents or leases the use of the property to a manufacturer or graphic arts producer.

Eligible purchases that the credit can be applied to include production related tangible personal property:

• Incorporated into real estate within a manufacturing or graphic arts facility.
• Used or consumed in activities such as preproduction material handling, receiving, quality control, inventory control, storage, staging, and packaging for shipping and transportation purposes.
• Used or consumed for research and development.

To earn and report the credit, you must complete and file Form ST-16, Report of Manufacturer’s Purchase Credit Earned, no later than June 30 following the calendar year in which you made the original purchase of exempt manufacturing or graphic arts machinery and equipment. If you do not file within this period, you forfeit the credit. The credit is not transferable and all unused credit expires the last day of the second calendar year following the year in which you made the purchase (e.g., credits earned during the year ended December 31, 2004 will expire December 31, 2006). Form ST-17, Report of Manufacturer’s Purchase Credit Used, is filed to report the portion of the credit that was used (including none, if applicable) during the prior calendar year and is due June 30.

Plante & Moran can assist you in identifying eligible purchases and preparing reports to claim your credits earned and used. You’ve made considerable investments in your business and this tax credit could reap you substantial savings. If you would like to know if you qualify for this tax credit, contact us today!

Disclaimer: The information provided in this memorandum is only a general summary and is being distributed with the understanding that Plante & Moran, PLLC is not rendering legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, assumes no liability whatsoever in connection with its use.