What is Wisconsin doing to stimulate new business?

In the past I have written about federal tax provisions as well as ways to protect oneself from identify theft, spam, and other problems. But in our office, we also have conversations with our clients about some of the newer provisions that Wisconsin has passed to help businesses operating in Wisconsin.

If you wonder about options for your own business, look at the Wisconsin Department of Revenue portal and scan some of the business tax incentives that are currently available, some of which were introduced for the first time in 2013. The site provides links that discuss new credits and deductions for businesses creating jobs in or moving to Wisconsin. Many of these pages have fact sheets that cover the tax benefits in detail and provide examples.

Please keep in mind that taxation is never constant. Some of these credits begin in 2013, and others end in 2013. If you have a new situation, be sure to talk to your tax adviser to determine whether any of the tax incentives might help your current-year situation.

Rather than discuss each one, I would like to tell you specifically about the manufacturing and agriculture credit, now available for tax years that begin on or after Jan. 1, 2013.

I recently attended continuing education instruction hosted by a legal firm in Milwaukee. A representative from the Wisconsin Department of Revenue discussed this credit and reminded us that it phases in over a four-year period and that in tax year 2016 and beyond it’s calculated at a rate of credit of 7.5%. Please remember that this credit can offset taxes at top rates of 7.9% for corporations and 7.65% for individuals. Doing the math, one realizes what a great credit this could be for those businesses deemed to be manufacturing a qualifying product. There are many specifics associated with this credit — certain industries that are excluded and the need to be assessed as a manufacturer or agricultural producer, etc. — but the benefits should certainly be considered if you feel this credit might apply to you.

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Another tax incentive I encourage you to consider each year is the job creation deduction, which has been available for a few years but is just as important as we begin to add jobs. This deduction allows for a subtraction deduction for increasing the number of full-time equivalent employees working in Wisconsin during the current year. Again, there is a fact sheet on the website that explains the formula for calculating what full-time equivalent means and discusses the potential deduction of $2,000 or $4,000 per eligible employee.

These are just a couple of examples. There are many more on the Wisconsin Department of Revenue website, and it makes sense to take a glance at the headings. Now is the time to consider your plans for finishing out the business year. Taxes are always a consideration in your year-end planning. Make sure that you don’t miss out on opportunities to save on taxes at the state level.

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