Clean Air Act and Clean Water Act Guide for Small Business
Clean Air Act and Clean Water Act explained for Illinois small business owners: slides, who needs permits, 2025 penalty amounts and key 2026 deadlines.
Last reviewed October 29, 2026 · General information, not legal advice
General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.
The Clean Air Act and the Clean Water Act are the two federal environmental laws that most often reach small businesses. The Clean Air Act covers air pollution and refrigerants. The Clean Water Act requires a permit before pollutants reach streams or storm sewers. The U.S. Environmental Protection Agency (EPA) enforces both, the Army Corps of Engineers issues dredge-and-fill permits, and Illinois EPA runs the state permit programs. Coverage depends on what a business does, not on its size. This page is for owners of construction, repair, retail, restaurant and service businesses. Page 3 has a short self-check we call the Drain-and-Stack Walkaround.
Slide show: The Clean Air and Clean Water Acts in seven slides
What the laws do
The Clean Air Act covers air pollution and refrigerants. The Clean Water Act requires a permit before pollutants reach streams or storm sewers.
Who they cover
Construction sites of 1 acre or more, many industrial sites, anyone servicing refrigeration or air conditioning, dry cleaners and auto body shops.
The core rule
No discharge without a permit, no knowing release of refrigerant, and trained painters with filtered booths in auto body work.
The big number
Federal civil penalties reach $68,445 a day under the Clean Water Act and $124,426 a day under the Clean Air Act, per violation (2025 amounts).
The deadline
Appliances with 15 pounds or more of HFC refrigerant follow leak-repair rules from January 1, 2026.
The penalties
Illinois sets a base civil ceiling of $100,000 per violation plus $25,000 a day, raised each July 1 from 2026 by a price-index formula. Knowing Clean Water Act violations carry fines of $5,000 to $50,000 a day, up to 3 years in prison, or both.
A common safeguard
With 100 or fewer employees, EPA's small-business policy can eliminate or greatly reduce penalties when a business finds a violation, discloses it within 21 days and corrects it.
Who is covered
Activity
Federal rule
Illinois pointer
Construction disturbing 1 or more acres
Stormwater permit, including smaller sites in a larger common plan of development
General permit ILR10; fee $250 under 5 acres, $750 for 5 acres or more
Industrial sites in 11 categories
Industrial stormwater permit or a no-exposure certification
General permit ILR00
Oil storage over 1,320 gallons aboveground
Spill plan (SPCC) if a spill could reach navigable waters
Same federal rule
Servicing refrigeration or air conditioning
Technician certification; no knowing venting (section 608)
Same federal rule
Dry cleaners using PCE
Air toxics rule, 40 CFR Part 63 Subpart M
Annual license for retail dry cleaners, $1,500 to $5,000
Auto body and coating sprayers
Air toxics rule, Subpart HHHHHH
ROSS registration for small emitters, $235 a year
For smaller sites in a larger development, read the Illinois permit terms.
How it touches your taxes and payroll
Fines and penalties paid to a government are not deductible under Internal Revenue Code section 162(f). Restitution or compliance payments can be deductible only if the order or settlement identifies them as such and the taxpayer proves it. The election to expense environmental cleanup costs (section 198) does not apply to costs paid or incurred after December 31, 2011. See our IRC guide and business expense deductions.
