Illinois has taken another step toward bolstering its business climate. On June 16, 2025, Governor JB Pritzker signed into law HB2755, the state’s FY2026 budget bill, which includes new and expanded tax credits aimed at attracting investment and strengthening the manufacturing and energy sectors.

Here’s what business owners and site selectors need to know about the most notable updates.

New: Advancing Innovative Manufacturing (AIM) Tax Credit

Illinois has introduced a new program called the Advancing Innovative Manufacturing (AIM) tax credit. This incentive is designed to encourage large-scale capital investments in industries critical to both the U.S. and global supply chains such as automotive, aerospace, food production, life sciences, energy, advanced materials, robotics, and more.

To qualify, manufacturers must invest at least $10 million in eligible capital improvements. The credit increases with the size of the investment:

  • $10M–$49.9M: up to 3% of the investment
  • $50M–$99.9M: up to 5%
  • $100M or more: up to 7%

The AIM credit can apply to capital investments made over a five-year period. Any unused credit can be carried forward for up to 10 years, but credits are only awarded once the project is fully placed in service. The program is administered by the Illinois Department of Commerce and Economic Opportunity (DCEO), and the application process will require detailed documentation.

This is a significant win for manufacturers considering expansion in Illinois. For companies with planned investments in the state, the AIM credit could reduce the long-term tax burden and enhance ROI.

Expanded: Enterprise Zone Act

Illinois’ long-standing Enterprise Zone program, which offers incentives like investment tax credits and sales tax exemptions, was also updated. In addition to solar, wind, and new electric-generating facilities, the law now includes high-voltage direct current (HVDC) converter stations as qualifying projects.

This update aligns with the state’s energy infrastructure goals and creates new opportunities for businesses involved in grid modernization and renewable transmission.

To access these benefits, businesses must meet specific job creation and investment thresholds within designated zones.

What This Means for Your Business

Whether you’re planning to expand, relocate, or invest in new property, these updated programs are worth a closer look. They offer real, measurable tax savings but navigating the eligibility requirements and application processes takes time and expertise.

Have questions about these Illinois updates or how they may apply to your project? At KE Andrews, our credits and incentives team can help you assess your eligibility, maximize your benefits, and ensure compliance with state requirements. Get in touch with us – we’re here to help you move forward with confidence.