Wisconsin Amends and Expands Business Development Tax Credit

On March 21, 2024, Gov. Tony Evers signed AB 627 into law as 2023 Wisconsin Act 143, adopting several changes to the Wisconsin business development tax credit (BDTC) for tax years beginning after December 31, 2023. Those changes, which enhance the credit program’s flexibility and competitiveness, include:

• Offering BDTC eligibility for businesses making capital investment in the state and retaining existing jobs or creating new jobs.
• Reducing from $1 million to $250,000 the minimum capital investment threshold to qualify for the credit based on capital investment.
• Creating a BDTC of up to 15% on investment in workforce housing and employee childcare programs.
• Specifying a 90-day period for the Wisconsin Economic Development Corp. (WEDC) to approve or deny BDTC applications for certifications.
• Clarifying that any unused program allocation for the credit, including allocations from closed awards, may be carried forward.

The program is now available for job retention projects under a reduced minimum capital investment threshold.

Wisconsin BDTC

The BDTC provides a performance-based refundable tax credit for new and expanding businesses in Wisconsin that are certified by the WEDC. Businesses must make qualifying capital investments and create or retain qualifying jobs in the state to be eligible for the program. The credit may be awarded for all the items listed below, as determined by the WEDC, and can be used to offset Wisconsin income or franchise tax liability: 

• Up to 10% of the wages paid to a qualifying employee in the tax year plus up to 5% of the wages paid if the qualifying employee is employed in an economically distressed area.
• Up to 3% of the personal property investment and up to 5% of the real property investment in a capital investment project.
• A percentage (determined by the WEDC) of the wages for functions related to corporate headquarters paid to a qualifying employee in the tax year.
• Up to 50% of qualifying training costs.
• Up to 15% of investment in workforce housing and employee childcare programs.
  
  

Any amount remaining after using the credit against tax liability will be refunded.

The table compares some of the credit’s provisions before and after passage of Act 143.