What is Manufacturer's Purchase Credit?

What is Manufacturer's Purchase Credit (MPC)?

Beginning September 1, 2004, qualifying manufacturers may earn a Manufacturer's Purchase Credit (MPC).  The MPC is earned when a manufacturer purchases manufacturing or graphics art machinery and equipment that qualifies for existing sales/use tax exemptions.  MPC may be used to pay state sales or use tax on future purchases of qualifying production-related tangible personal property.  All unused MPC expires the last day of the second calendar year following the year in which the original tax-exempt purchase was made.  MPC may not be transferred to another party.  MPC is equal to half of the 6.25% sales tax that would have been owed if the purchase was not otherwise exempt. 

For more information, see Informational Bulletin FY2005-05, Miscellaneous Sales and Use Tax Charges, Illinois Administrative Code 130.325, Graphic Art Machinery and Equipment Exemption, and 130.330, Manufacturing Machinery and Equipment. 

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