Illinois DCEO gives Amazon tax credits worth $10 million

Hilary Gowins

VP of comms @illinoispolicy. Likes dogs and basketball.

Hilary Gowins
August 12, 2015

Illinois DCEO gives Amazon tax credits worth $10 million

With special tax breaks for Amazon, Illinois resorts to sweetheart deals to overcome the effects of the state’s anti-growth policies, leaving smaller businesses to shoulder the full tax and regulatory burden.

Online retail giant Amazon.com is worth $250 billion, making it the most valuable retailer in the world, according to CNN Money.

For years, the company steered clear of a physical presence in Illinois – the state’s “Amazon tax,” e-commerce tax and sales tax made the prospect expensive and unappealing.

But on Aug. 10, Amazon announced it would open a 500,000-square-foot fulfillment center in Joliet, Illinois, investing a total of $40 million and bringing 1,000 full-time jobs paying between $13 and $15 per hour to the area.

These new jobs are great news for Will County. From 2013 to 2014, the county achieved a jobs-growth rate of just 1.1 percent, ranking it 236th of the U.S.’s 340 largest counties, and tied for fifth out of Illinois’ 10 largest counties, according to the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

But state officials have done very little to rectify the policy pitfalls that kept Amazon away from Illinois for so long. Instead, they took a tired approach to luring the retail giant to the state: The Department of Commerce and Economic Opportunity, or DCEO, granted Amazon a tax break of up to 10 years in exchange for the company’s promise to invest $40 million in the state, according to the Chicago Tribune. These tax credits will likely be worth $1 million per year, and $10 million over the course of their 10-year lifespan.

Illinois politicians have been handing out special favors to lure big businesses (or keep them from fleeing the state) for years. On Aug. 18, 2014, the DCEO gave AAR Corp. (a company worth $2.2 billion) $15 million in exchange for 500 jobs at a small airport in Rockford. In June 2014, former Gov. Pat Quinn made a 10-year tax-credit deal worth $12 million with eBay, which pledged to create 360 jobs in downtown Chicago.

By continuing to artificially prop up big businesses while forcing small- and mid-sized businesses to continue shouldering the state’s full tax burden, Illinois politicians are creating an environment in which it is nearly impossible for the little guy to succeed.

If Illinois’ business environment is bad enough to deter the biggest retailer in the country from doing business here for years, imagine how difficult it is for mom-and-pop shops or fledgling entrepreneurs to make a go of it.

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