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Qualified, experienced BKD client service professionals write the contents of these articles. We urge you to carefully consider all of the facts and circumstances of your situation before applying specific information in our articles. Consult your BKD advisor before acting on any matter covered in these articles.
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April 2009
Illinois Sales/Use Tax Alert: Illinois Manufacturer’s Purchase
Credit Set to Expire July 30, 2009
Illinois regulation, Ill. Admin. Code §130.331, was recently amended to reflect the pending expiration of the Manufacturer’s Purchase Credit (MPC). Effective July 30, 2009, MPC will no longer be available. The practical application is that companies must use all of their available MPC prior to July 30, 2009.
MPC is a credit earned at the time a manufacturer purchases qualifying machinery and equipment. MPC is earned on 50 percent of the state sales tax that would have been incurred on the purchase had it not qualified for exemption. The credit may be applied against the state tax on purchases of qualifying production-related tangible personal property. The credit is a nontransferable credit.
There is current legislation introduced through Illinois House Bill 23 to extend the credit to August 2014. The passage of this legislation is uncertain at this time.
Annual Reports of MPC Earned (Form ST-16) and Used (Form ST17) are due June 30, 2009, for MPC earned and used in 2008. MPC earned and used between January 1 and July 29, 2009, will be due by June 30, 2010.
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