Who is eligible to obtain an Illinois Department of Revenue Building Materials Exemption Certificate (BMEC)?
- Each construction contractor or other entity that purchases building materials to be permanently incorporated into real estate in an Enterprise Zone or River Edge Redevelopment Zone by rehabilitation, remodeling or new construction.
- Each construction contractor or other entity that purchases building materials that will be permanently incorporated into a High Impact Business location as designated by the Department of Commerce and Economic Opportunity.
How do I apply for a Building Materials Exemption Certificate (BMEC)?
All applications must be submitted through the "Business Incentives Reporting and Building Materials Exemption Certification" area on the Illinois Department of Revenue's (IDOR) website.
The following groups have specific instructions:
- Construction contractors or other entities seeking exemption certificates must go through the Zone Administrator of the zone where the project is located or through the High Impact Business project manager.
IMPORTANT: If you are a sole proprietor using a Social Security Number (SSN) as your business identification number, you must first obtain an "Applicant ID" through the Building Materials Exemption Certificate program.
- Zone Administrators must submit applications for those construction contractors or other entities purchasing materials to permanently incorporate into real estate in an Enterprise Zone or River Edge Redevelopment Zone.
- High Impact Business project managers must submit applications for those construction contractors or other entities purchasing materials to be permanently incorporated into a High Impact Business location.
What do I do if I don't know which zone I'm in or who the Zone Administrator is for my zone. How do I find that information?
Zone maps, Zone Administrators and zone contacts are available from the Illinois Department of Commerce and Economic Opportunity (DCEO).
What information does an Enterprise Zone Administrator, River Edge Redevelopment Zone Administrator, or High Impact Business project manager have to provide to apply for an exemption certificate?
- Name, address and email of the construction contractor or other entity seeking a certificate;
- Name of the Enterprise Zone or River Edge Redevelopment Zone (not necessary for High Impact Business locations);
- The address (or location) of the project;
- The estimated amount of the exemption based on the percentage of the contract that consists of materials;
- The project's expected completion date;
- Federal Employer Identification Number (FEIN) and/or applicant ID
What if the applicant does not have a FEIN?
n applicant without a FEIN must go to the Illinois Department of Revenue's (IDOR) secure website and enter his or her Social Security number. Illinois will provide an Applicant ID, which the applicant can bring to the Zone Administrator or High Impact Business project manager to complete the application.
What information does a construction contractor seeking an Applicant ID have to provide to be assigned this number?
- Social Security number (SSN)
- Email address
- Mailing address
- Phone number
For how long is a certificate valid?
Certificates are valid for a maximum of two years however, they can be issued for a shorter period of time. For example: if the project is a short-term project expected to last six months, the certificate may be issued for a six month time frame. It does not need to encompass an entire two-year period. The exact expiration date of each certificate will vary and is based upon the expected project completion date provided at the time the application is submitted.
Am I able to use the certificate up to and including the date of expiration?
No. The expiration date on the certificate is the date the certificate is no longer valid.
Do I need a new certificate if the original is expired, but my project is not complete?
Yes. If your Building Materials Exemption Certificate is set to expire before your project is complete, you must seek a renewal through the Zone Administrator or High Impact Business project manager who submitted your original application.
Can a sub-contractor use the general contractor's exemption certificate to purchase materials for a project?
No. Each contractor, sub-contractor, or other entity that purchases qualified building materials for a project must have their own exemption certificate. Contractors or sub-contractors may not use other contractors' or other entities' exemption certificates.
Does a contractor or other entity purchasing exempt building materials need to apply for and receive a separate certificate each time it wants to make an exempt purchase?
No. Each certificate allows the contractor or entity identified on the certificate to make unlimited purchases of eligible building materials for the project identified on the certificate until the expiration date identified on the certificate. However, each time building materials are purchased, the purchaser must leave with the seller a completed EZ-1 form, identifying what was purchased, who made the purchase, for what project the purchase was made, and the purchaser's exemption certificate number.
Can a contractor or other entity use a certificate to purchase materials for a new project if the new project is at the same location as the one identified on the certificate?
No. The certificate is good for the project identified to the Zone Administrator or High Impact Business project manager when the application was submitted. The original application included a contract amount. A new contract, or expansion of a contract beyond what was identified in the certificate application, would constitute a new project and require a new exemption certificate.
Can a contractor or other entity use the same certificate to purchase materials for multiple projects?
No. Each certificate is unique to that project. It cannot be used for any other project and can only be used for the project for which it was issued.
If an applicant must secure a new certificate for each project, how much information will have to be resubmitted?
The applicant must provide identifying business information only for the first certificate. Each subsequent certificate can be issued based on the contractor's FEIN or previously-issued ID, the location of the project, an estimate of the dollar amount of the materials subject to exemption, and the expected date that the project will conclude.
I am a Zone Administrator. What if I make an error, need to edit or change information when filling in the certificate?
If you are still on the Certificate Information page, click the link in the field that is incorrect, and enter the correct information. If you are on the Verify Certificate page, click "cancel" and go back to the previous page (the Certificate Information page) to make the necessary changes. DO NOT RESCIND THE CERTIFICATE. Doing so will NOT allow you to start over. Once you rescind a certificate a new certificate CANNOT be created under that contractor's ID for that project.
Rescinded certificates can only be reinstated by contacting the Illinois Department of Revenue.
I am a Zone Administrator. I accidentally rescinded a certificate. How do I issue a new one?
Once a certificate is rescinded by you, it is invalid. You will not be able to issue a new certificate for that contractor for that project. You will need to
contact the Illinois Department of Revenue, to reinstate a rescinded certificate.
How does an applicant access the certificate once it is issued?
The Illinois Department of Revenue will send a message to the email address submitted on the application with a link. The applicant can access its exemption certificate by clicking on the link in the email message and following the directions provided.
How will a retailer know when a purchaser has a valid exemption certificate?
When purchasing tax exempt building materials, the purchaser must submit a signed statement to the retailer that contains the certificate number, the zone, the project, and the materials being purchased. Form EZ-1, Building Materials Exemption Certification, contains all necessary information and will be provided to certificate holders when they receive their certificates.
Form EZ-1 is also available for download here.
What are the penalties for misuse of an exemption certificate?
Certificate holders are responsible for ensuring that their certificates are used only to make qualified purchases. A certificate holder who uses the certificate or allows it to be used to improperly avoid tax will be assessed taxes and penalties on the purchase, an additional monetary penalty equal to the state and local sales taxes on the purchase, and may be barred from securing additional certificates.
What qualifies as "building materials" eligible for sales tax exemption?
Building materials that are eligible for the sales tax exemption include items that are permanently affixed to real property such as lumber, mortar, glued-down carpets, paint, wallpaper, and similar affixed items.
Who should be issued a Building Materials Exemption Certificate for a project that does not use contractors?
Building Materials Exemption Certificates should be applied for and issued to the entity that will be making purchases of exempt materials, whether contractor or other entity. The certificate holder is responsible for ensuring that the certificate is used only to make qualified purchases.
Can building materials purchased prior to the issuance of a Building Materials Exemption Certificate be exempted from sales tax retroactively?
No. Purchases made prior to issuance of the Building Materials Exemption Certificates cannot be exempt.