Walker signs tax credit portability bill in Janesville
JANESVILLE—Citing Wisconsin's fiscal stability and business climate as advantages over Illinois, Gov. Scott Walker said his state picked up another Wednesday when he signed a bill that allows the transfer of state income tax credits awarded as economic development incentives.
The bill, authored by Rep. Amy Loudenbeck, R-Clinton, and Sen. Rick Gudex, R-Fond du Lac, passed the Senate 32-0 and the Assembly 96-0.
As part of its economic development toolbox, the state for years has provided income tax credits if companies meet benchmarks spelled out in economic development contracts.
Forward Janesville, where Walker signed the bill Wednesday, has long maintained that the income tax credits were of little value to many companies because they didn't generate enough income to make the credits meaningful. The group argued that companies involved in the transfer of tax credits would have a relationship that creates jobs and fosters investment on the local level.
For example, Company A might want to lease space from the more established Company B. Company B makes improvements to its facility to accommodate Company A and therefore assumes a degree of risk. As a way to mitigate that risk, Company A—if it doesn't have sufficient income to use awarded tax credits—would transfer them to Company B.
That's what the bill now allows.
“This is important for Forward Janesville but also for other communities across the state where they can take these economic development job credits and make them transferable,” Walker said. “It's something that's been on the Forward Janesville and Rock County legislative agenda for some time.
“It's a good day for Forward Janesville, a good day for Rock County and a good day for other communities around the state that want to have more tools in their tool chest when it comes to economic development.”
Loudenbeck said the bill would help entrepreneurs, promote existing business expansion and retention efforts and secure new business development investments.
It allows for up to $15 million of economic development tax credits to be re-assigned over a three-year period using a mechanism of pre-approvals and notifications authorized and guided by the Wisconsin Economic Development Corp. and the state Department of Revenue.
“I appreciate Gov. Walker making another trip to Rock County and for recognizing that this bill was inspired by local economic development professionals,” Loudenbeck said.
Walker said Forward Janesville and Rock County 5.0 are doing impressive work. He said two of the organization's three key goals—expansion of Interstate 90/39, tax credit portability and reform of tax increment financing—can be checked off, and the other will be done in a matter of years.