Wisconsin’s long-held reputation as a state that is unfriendly to business is changing—and for good reason. Our state is one of only a few nationally with a balanced budget, and we are taking decisive steps to ensure Wisconsin remains a national leader in worker productivity, even as our economy evolves. Meanwhile, we’ve adopted pro-business policies designed to create a world-class business climate that encourages business startup, growth and attraction.
When Governor Scott Walker took office in 2011, he called an ambitious special legislative session on job creation and deficit reduction, which resulted in a budget bill that erased a $3.6 billion dollar deficit while freezing property taxes and transforming public employee and local government costs. This helped provide fiscal stability on the state level with long-term fixes that included pro-growth tax policies, regulatory certainty and lawsuit reform.
As a result, Wisconsin’s business climate has improved dramatically in the last two years, and we’ve achieved national visibility for our efforts. Chief Executive magazine’s ranking of Wisconsin, for example, rose to 20 in 2012, up from 41 in 2010. Meanwhile, CNBC’s latest ranking puts Wisconsin at 17 compared to the previous year’s 25. And Site Selection magazine’s most recent ranking places Wisconsin at 13 in its study of the top 25 business climates. This is the first time Wisconsin has made this list in more than a decade.
Among the recent policy changes benefitting companies operating in the state are the following:
Manufacturing Tax Credit
Individuals and corporations receive a tax credit for income derived from manufacturing or agriculture starting in 2013. The full benefit of the tax credit will be phased in over four years, at which point companies claiming the credit will pay virtually no Wisconsin income taxes. Manufacturing and agricultural businesses whose tax liabilities are reduced through this tax credit will be able to funnel their savings back into their companies.
Capital Gains
Individuals investing in Wisconsin-based businesses and holding those investments for at least five years now enjoy a tax exemption on capital gains earned on those investments. This exemption also extends to capital gains reinvested in state businesses. This change makes investments in Wisconsin-based businesses more attractive
with the aim of increasing capital flow into Wisconsin companies with the potential of creating jobs for Wisconsin workers.
Economic Development Leadership
The Wisconsin Economic Development Corporation (WEDC) was created in July 2011 to replace the Wisconsin Department of Commerce. The new public-private organization develops, executes and sponsors large-scale, statewide economic development projects aimed at advancing key industry sectors, generating new business startups, and improving the performance of existing businesses in Wisconsin. WEDC’s innovative approaches to economic development create new opportunities for Wisconsin businesses, with the result being sustained growth for the state’s economy.
Workforce Development
Governor Walker established a Special Consultant for Business and Workforce Development to identify barriers to business development and job growth in Wisconsin. Along with a study by Competitive Wisconsin on workforce development needs in key industry sectors, this effort will help policymakers maintain a focus on workforce development, work environment, and policy issues for years to come.
Early Stage Capital
To encourage investment in small, high-technology businesses that have high growth potential, Wisconsin provides income tax credits for investors in certified businesses through the Act 255 Angel
Investment Credits Program. Since its inception in 2005, this program, which has become a model for other states, has helped leverage $637 million in private investments in 216 companies.
Business Relocation Tax Credit
Businesses relocating to Wisconsin from other states may be eligible for an income tax holiday if they have not done business here during the two previous taxable years. They may not have to pay any corporate or pass-through personal income taxes for a two-year period.
Health Savings Accounts
Contributions are now deductible from state income tax.
Tort Reform
Wisconsin has enacted several provisions to improve the state’s litigation climate, including measures that require additional proof of defective design in product liability cases, liability for frivolous lawsuits, and caps on punitive damages.
Job Creation Tax Incentive
Planning to hire? Companies can now take an exclusion from income if they create jobs in Wisconsin. Exclusions vary depending on the size of the company. For more information on these and other policy advantages Wisconsin offers, contact your Wisconsin Economic Development Corporation regional account manager listed at www.inwisconsin.com/contact-us.
