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News & Press: WEDC Corner

WEDC Corner, July 2014

Monday, July 28, 2014   (0 Comments)
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WEDC Finalizes Guidelines for Transferability of Tax Credits

The Wisconsin Economic Development Corporation’s most popular tax credit program has a new feature that is expected to prompt more companies to utilize the program, a change expected to lead to additional growth and job creation throughout the state.

Governor Scott Walker in April signed a bill into law that allows companies receiving state Economic Development Tax Credits to transfer those credits to other companies under certain conditions. Before the law was changed, those credits could only be used by the company that was authorized to receive them. If that company had no state income tax liability, it couldn't utilized the credit, a provision that hampered the effectiveness of the program.

Under the new law, which was unanimously strongly backed by the Wisconsin Economic Development Association (WEDA), a company with no or little income tax liability that is planning a project can now receive those credits and transfer them to someone else in return for non-cash goods or services related to the project for which the credits were authorized.

"Tax credits are vital to help bridge the financial gap needed so businesses can expand, grow jobs or move a project forward,” said WEDA President Patrick Schloss. "The transferability of tax credits allows for additional opportunities to inject equity into a project and increases in economic activity.”

"We believe this change will lead to increased use of the tax credit, and will encourage more Wisconsin-based companies to grow here and more out-of-state companies to relocate here,” said Reed Hall, secretary and CEO of WEDC, the state’s lead economic development organization. "The fact that legislation received unanimous bipartisan support is a testament to the widespread belief that the new law will be a shot in the arm for the state’s economy.”

Under the WEDC guidelines for the program, companies must express their intent to transfer the credit at the time of application and must meet at least one of four requirements:

  • Have corporate HQ in Wisconsin or plan to relocate here
  • Have more than half of employees located in WI
  • Expand workforce in WI by at least 10%
  • Make a significant capital investment in the state

The transferability provision can only be applied to new projects, not ones that also have been authorized to receive Economic Development Tax Credits.

WEDC will ensure that the stringent standards of this program all followed, including:

  • Capping transferable credits at $500,000 or 200% of their cash value – whichever is less
  • Requiring the company receiving the credits to be in good standing with the State of Wisconsin
  • Requiring services and products provided be non-cash and connected to the project

State Lifts Moratorium on Historic Preservation Tax Credit

WEDC has lifted the temporary moratorium on the state’s Historic Preservation Tax Credit. WEDC, in consultation with the state Department of Administration, imposed the temporary moratorium on June 23, after receiving applications totaling more than $35 million of certified tax credit eligibility. That figure far exceeded the projected the $4 million in tax credit allocations estimated at the time the legislation was passed.

After a three-week review of the program, WEDC officials have determined that the moratorium can be lifted because of the rigorous application process required by the State Historical Society and the National Park Service before applications are submitted to WEDC.

In addition, WEDC will begin collecting additional information for each project on the return on investment to the state, the long-term and short-term job creation, the impact on local tax revenue, the level of participation from local partners and more.

Governor Walker in December 2013 signed a bill into law that increased the state’s existing Historic Preservation Tax Credit from 10 percent to 20 percent. That law also created a new Qualified Rehabilitated Buildings Tax Credit for owners of non-historic commercial buildings built before 1936.

The moratorium is being lifted for the Certified Historic Building Program, but will remain in place for non-historic buildings as that program continues to be reviewed.

La Crosse is Wisconsin’s Newest Main Street Community

The WEDC has designated the City of La Crosse as a Wisconsin Main Street community. La Crosse joins a select group of communities that have demonstrated a sustained commitment to downtown revitalization.

La Crosse is the only community in Wisconsin to earn such designation in 2014, and it becomes the state’s 36th currently active Main Street community.

La Crosse was accepted into the program based on an extensive application process that highlights local achievements as well as numerous ongoing projects that will continue to improve and enhance the downtown environment.

The Wisconsin Main Street Program is a comprehensive revitalization program designed to promote the historic and economic redevelopment of traditional business districts in Wisconsin. After a thorough application and review process, WEDC selects communities to join the program, which is part of a nationwide program of the National Trust for Historic Preservation. These communities receive technical support and training needed to ensure that their downtown districts continue to thrive as centers of community activity and commerce.

La Crosse was selected because of its aggressive and innovative efforts to promote the city’s business district through its local downtown organization.

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