An Act to amend 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g) and 71.45 (2) (a) 10.; to create 71.05 (6) (b) 57., 71.07 (12), 71.10 (4) (em), 71.26 (2) (a) 13., 71.28 (12), 71.30 (3) (am), 71.45 (2) (a) 25., 71.47 (12), 71.49 (1) (am), 73.03 (78) and 73.03 (79) of the statutes; Relating to: creating an employee ownership conversion costs tax credit, a deduction for capital gains from the transfer of a business to employee ownership, and an employee ownership education and outreach program. (FE)
AB17 creates a set of tax incentives and administrative programs intended to encourage business transitions to employee ownership in Wisconsin. The bill authorizes a nonrefundable income tax credit for eligible businesses that incur costs converting to either an employee stock ownership plan (ESOP) or a worker-owned cooperative, with the credit equal to 50 percent of conversion costs for ESOP conversions and 70 percent for worker-owned cooperative conversions, capped at $100,000 per business. It also creates corresponding deductions/subtractions for capital gains realized when ownership of a Wisconsin business is transferred to one of those employee-owned structures, provided the new employee ownership entity ends up owning more than 50 percent of the business.
The bill amends multiple provisions of Wisconsin’s individual income tax, corporate income and franchise tax, and pass-through entity tax rules to add the new employee-ownership credit and capital gains deduction. It also directs the Department of Revenue to certify eligible businesses, administer the credit allocation process, and establish an outreach and education program on employee ownership, succession planning, and related technical assistance. The bill limits annual credit allocations to $5 million across the new credit programs and applies the capital gains subtraction beginning with taxable years starting January 1, 2025.
The available voting history suggests strong support in the Assembly, where the bill passed 96-0, indicating broad bipartisan or at least unanimous chamber approval at that stage. No committee transcript is available, so there is no recorded floor or committee debate in the provided materials. Overall, the bill appears to have been viewed favorably as a business-succession and workforce-ownership measure.
Because no committee discussion transcripts are provided, there is no direct record of objections or negotiated changes. The main policy questions implied by the text are fiscal cost, the use of tax expenditures to steer business succession, and whether the incentives should favor employee ownership structures over other transfer options. The bill also contains administrative limits and eligibility rules—such as requiring DOR approval, excluding businesses that already have ESOPs or are already worker-owned cooperatives, and capping total annual credits—that appear designed to address potential concerns about cost and program scope.