United States: Wisconsin Adopts Changes To Business Tax Incentive Programs

On July 13, Wisconsin Governor Scott Walker signed legislation making sweeping changes to existing state income tax credit programs.1 Specifically, the state enacted the Business Development Tax Credit program to replace the Economic Development Tax Credit and the Job Creation Tax Credit, eliminated the Job Creation Deduction, and made changes to the Research Expense Tax Credit and Manufacturing and Agricultural Tax Credit programs.

Business Development Tax Credit Enacted

Effective for taxable years beginning on or after January 1, 2016, the Business Development Tax Credit is created as a refundable income tax incentive program.2 The credit is available to eligible businesses3 that operate or intend to operate a business in Wisconsin, and enter into a contract with the Wisconsin Economic Development Corporation (WEDC).4 The WEDC may provide a refundable credit to a qualified business that includes some or all of the following amounts:

  • Up to 15 percent of the wages paid to an eligible employee.5 Generally, a 10 percent credit is available, but an additional 5 percent credit may be available if the eligible employee is employed in an economically distressed area;6
  • Up to 50 percent of the training costs incurred to enhance an eligible employee's knowledge and skills in the workplace;7
  • Up to 3 percent of capital investment in personal property and up to 5 percent of eligible capital investment in real property provided the investment is at least $1,000,000 or, if less than $1,000,000, the investment is equal to at least $10,000 per eligible employee employed on the project;8 and
  • An amount equal to a percentage of wages paid to an eligible employee created or retained in connection with the claimant's location or retention of its corporate headquarters in Wisconsin.9

The credit will be awarded by the WEDC on a case-by-case basis, and the combination and amount of benefits will be determined based on the level of capital investment, the number of jobs created and/or retained, project location, and the strategic importance of the business. In the event the applicant does not have sufficient Wisconsin income tax liability to absorb the entire credit, any excess credits will be refunded to the company.10

Other Legislative Updates

Jobs Tax Credit and Economic Development Tax Credit. The Jobs Tax Credit and Economic Development Tax Credit are no longer available on or after January 1, 2016.11 However, these credits may still be claimed if the company has executed a contract or a letter of intent to enter into a contract prior to January 1, 2016.12

Job Creation Deduction. The subtraction from federal taxable income based on the increase in the number of full-time employees that are employed in Wisconsin is no longer available for taxable years beginning on or after January 1, 2015.13

Research Expense Tax Credit. For tax years beginning on or after January 1, 2015, the Research Expense Tax Credit is increased to 5.75 percent from 5 percent of qualified expenses (the credit is increased to 11.5 percent from 10 percent for internal combustion engine activities and energy efficient products). The credit is based on the amount by which qualified research expense exceeds 50 percent of the average qualified research expense for the previous 3 years.14

Manufacturing and Agriculture Credit. For taxable years beginning after December 31, 2014 and before January 1, 2016, the Manufacturing and Agriculture Credit is reduced to 5.025 percent from 5.526 percent.15 For taxable years beginning on or after January 1, 2016, the credit percentage remains at 7.5 percent.16 In addition, the following changes are effective retroactively to January 1, 2013:

  • "Direct costs" and "indirect costs" are defined as any ordinary and necessary business expenses that are deductible under the Internal Revenue Code;17 and
  • Once approved, taxpayers may claim the credit for classification as a manufacturer even if they are not eligible for listing on the Wisconsin Department of Revenue's manufacturing roll until the following year.18


The Business Development Tax Credit was created with the intention of encouraging job creation and capital investment in Wisconsin. It is important to note that the benefits associated with the new Business Development Tax Credit program are negotiated with the WEDC and are not available "as of right." If the company meets the program criteria, the company is able to initiate negotiations with the WEDC. Once approved, the company must enter into a formal contract with the WEDC. The Business Development Credit is limited to 10 cumulative years.19

Also, the ability to first apply the enhanced Manufacturing and Agriculture Tax Credit against their tax liabilities may potentially allow eligible companies to sufficiently reduce their liabilities and receive Business Development Tax Credit refunds. Due to the modifications to the requirements for eligibility which are retroactive to 2013, taxpayers who were previously ineligible for this credit may now qualify.


1 Act 55 (S.B. 21), Laws 2015.

2 WIS. STAT. § 238.308.

3 WIS. STAT. § 238.308(3). A person is eligible to receive the credit if, in each year for which the person claims the credit, the person increases net employment in Wisconsin in the person's business above its net employment in the previous year. Unlike similar programs offered by other states, the Business Development Tax Credit Program does not specify a minimum amount of increased employment.

4 WIS. STAT. § 238.308(2).

5 An "eligible employee" is any full-time employee of a WEDC certified business. WIS. STAT. § 238.308(1).

6 WIS. STAT. § 238.308(4)(a).1, .2.

7 WIS. STAT. § 238.308(4)(a).3.

8 WIS. STAT. § 238.308(4)(a).4.

9 WIS. STAT. § 238.308(4)(a).5.

10 Act 55 (S.B. 21), Laws 2015, §§ 2183, 2316, and 2432. WIS. STAT. §§ 71.07(3y)(d)(2); 71.28(3y)(d)(2); 71.47(3y)(d)(2). Note that the total amount of credit available to be allocated by the WEDC for grants is limited to $17 million for tax year 2016, with an annual limit of $22 million thereafter. Unused amounts may be carried forward. WIS. STAT. § 238.308(4)(b).

11 WIS. STAT. §§ 238.16(6); 238.303(4).

12 Id.

13 WIS. STAT. § 71.05(6)(b)47m.

14 WIS. STAT. § 71.28(4)(ad)4, 5, 6.

15 WIS. STAT. § 71.28(5n)(b)3.

16 WIS. STAT. § 71.28(5n)(b)4.

17 Act 55 (S.B. 21), Laws 2015, § 9437(1); WIS. STAT. § 71.28(5n)(a)3, 4. Previously, the expenses had to qualify as deductible under IRC § 162.

18 Act 55 (S.B. 21), Laws 2015, § 9437(1); WIS. STAT. § 71.28(5n)(a)5.d.

19 WIS. STAT. § 238.308(2)(b).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions