Helping manufacturers thrive in Illinois

Manufacturing is one of Illinois’ largest economic engines, providing more than 592,000 jobs across the state and accounting for twelve percent of the Gross State Product.

This year, House Republicans led the charge to modernize and make permanent the Manufacturer’s Purchase Credit (MPC) to save Illinois manufacturers more than $40 million and help them thrive in the Land of Lincoln. Under the new law, manufacturers will not pay state or local sales tax on consumables used or consumed in the manufacturing process. These include things like fuel, solvents, coolants, oils, adhesives, hand tools, protective apparel, and fire and safety equipment.

Some of the biggest improvements made to the MPC:
  • It is permanent and modernized. The new law provides certainty as the previous MPC had been turned on and off several times.
  • It exempts manufacturers from paying both state and local sales tax, whereas before it only applied to state tax. 
  • It is simplified – manufacturers simply will be exempt from paying taxes on these consumables. The previous MPC was a very convoluted process where companies “earned MPC” for buying machinery and equipment. That MPC could then be used to offset the cost of these consumables. Now that MPC is part of the Manufacturing Machinery & Equipment (MME) it is much simpler and straightforward making it easier for companies to use.