Wisconsin’s Business Development Tax Credit Program provides businesses located in or relocating to the state with refundable tax credits. This supports local job creation, capital investment, training and corporate headquarters location or retention. These credits can reduce income/franchise tax liability or provide a refund. Businesses then have more cash flow to expand a project’s scope, accelerate a project’s timeline or enhance payroll.
When combined with the state’s manufacturing and agriculture tax credit, which reduces the 7.9% tax rate to 0.4%, the refundable tax credit is almost completely refunded due to Wisconsin’s low corporate tax rate.
Per state statute, companies can earn:
- 10% tax credit on new jobs (based on payroll).
- Or, 5% on real property and 3% on personal property.
In competitive scenarios when a project considers multiple states, or when the project includes a corporate headquarter, projects can earn credits on both jobs and capital expenditures.
Below is an example of how the BTC program can impact a project’s cash flow. If the project was a competitive project or included a company headquarter, the project could earn both the $250,000 job tax credit and $900,000 capital expenditure tax credit totaling $1.15 million in credits. (Note: All tax credits are subject to negotiation and approval with the Wisconsin Economic Development Corporation.)
- 50 new jobs paying $50,000 per year could earn $250,000 in tax credits based on jobs.
- Or, capital expenditures totaling $20 million ($15 million real property and $5 million personal property) could receive up to $900,000 based on capital expenditures.
If the project was a competitive project or included a company headquarter, the project could earn both the $250,000 job tax credit and $900,000 capital expenditure tax credit totaling $1.15 million in credits.