Enhancing Economic Development: Wisconsin's New Business Development Tax Credit Law
10 Apr 2024
Wisconsin Governor Tony Evers recently signed Assembly Bill 627 into law as 2023 WI Act 143 to rejuvenate economic growth and bolster competitiveness. This legislative milestone marks a significant overhaul of the state's Business Development Tax Credit (BTC) program, shifting its focus from job creation to capital expenditure. The move comes as a response to the changing economic landscape and aims to position Wisconsin as a more attractive destination for businesses seeking to invest in the state.
Addressing Outdated Policies
The previous iteration of the BTC program relied heavily on job creation metrics, which posed challenges amidst a persistent workforce shortage. Recognizing the limitations of this approach, the new law eliminates the requirement for businesses to increase net employment year over year. Instead, it emphasizes capital investment as the primary driver of eligibility for tax credits. This shift reflects the evolving needs of businesses, many of which are turning to automation and other capital-intensive measures to overcome labor shortages.
Flexibility and Competitiveness
By decoupling BTC eligibility from strict job creation targets, the revamped program offers businesses greater flexibility to pursue investments aligned with their growth strategies. Businesses can now qualify for tax credits by making capital investments in the state while retaining existing jobs. This change incentivizes businesses to expand their operations and acknowledges the importance of retaining skilled talent within the state.
Incentivizing Strategic Investments
Under the new legislation, additional tax credits are available for businesses that invest in workforce housing and childcare for their employees. This proactive approach recognizes these amenities' critical role in attracting and retaining a skilled workforce. Businesses can claim tax credits of up to 15 percent of their investments in workforce housing and employee childcare programs, further incentivizing strategic investments that support employee well-being and productivity.
Streamlined Approval Process
Recognizing the urgency of business decision-making, the new law mandates the Wisconsin Economic Development Corporation (WEDC) to approve or deny BTC awards within 90 days of receiving an application. This streamlined approval process provides businesses with certainty and expedites the implementation of investment plans, fostering a conducive environment for economic growth.
The passage of Assembly Bill 627 marks a pivotal moment in Wisconsin's economic development strategy. By modernizing the Business Development Tax Credit program, the state is better positioned to attract investment, spur innovation, and create new opportunities for businesses and workers. With a renewed focus on capital expenditures and strategic incentives, Wisconsin is poised to emerge as a dynamic hub for business growth and prosperity in the years to come.