News Updates

Sales tax rebate database analysis highlights prevalence of rebate agreements in metropolitan Chicago

The structure and duration of sales tax rebate agreements greatly influence the level of public funds local governments use to attract and retain businesses and developments. CMAP’s analysis of the Illinois Department of Revenue (IDOR) sales tax agreement database reveals the existence of 343 active sales tax rebate agreements in more than 130 local governments in the seven-county region.

This tax policy update summarizes CMAP’s analysis of sales tax rebates in metropolitan Chicago, including the structure of agreements, types of businesses receiving the rebates, and amount of sales taxes being rebated, using information downloaded from the IDOR database in November 2013. The IDOR database was developed following the August 2012 passage of Public Act 97-0976, which requires municipalities to report information on their existing sales tax agreements. The analysis in this policy update builds on CMAP’s July 2013 report Examination of Local Economic Development Incentives in Northeastern Illinois, which highlighted the prevalence of sales tax rebate agreements among local governments.