Wisconsin Assembly Bill AB670

Wisconsin 2025-2026 Regular Session

• Introduced: 11/19/25
• Refer: 11/19/25
• Report Pass: 1/21/26
• Refer: 1/21/26
• Refer: 1/30/26
• Report Pass: 2/4/26
• Refer: 2/4/26
• Refer: 2/6/26
• Engrossed: 2/19/26
• Refer: 2/25/26
• Enrolled: 3/23/26
• Chaptered: 4/3/26
• Passed: 4/3/26

Caption

An Act to renumber and amend 77.54 (57d) (a) 4.; to create 77.54 (57d) (a) 2m., 77.54 (57d) (a) 4. b. and 77.54 (57d) (b) 4. of the statutes; Relating to: exempting persons engaged in certain contract research services from the sales and use tax. (FE)

Summary

AB670 creates a sales and use tax exemption for certain contract research services in Wisconsin. The bill defines “contract research services” as research performed by a person on behalf of a customer that would qualify as “qualified research” if the customer’s own employees performed it. It also updates the definition of “qualified research” to include research funded by customers for whom contract research services are provided, and it makes conforming changes to the statute governing the exemption. In practical terms, the bill expands the existing tax exemption framework in s. 77.54 (57d) to cover businesses that perform research for clients, as long as the work meets the federal qualified research standard under Internal Revenue Code section 41(d)(1). The act takes effect on the first day of the third month after publication, meaning the exemption becomes available shortly after enactment and will affect sales and use tax treatment for eligible research providers and their customers.

Impact

The bill amends Wisconsin Statutes section 77.54 (57d) by adding a new definition of contract research services, broadening the definition of qualified research, and adding a new category of persons eligible for the sales and use tax exemption. This changes state tax law by exempting qualifying contract research transactions from sales and use tax, which may reduce tax liability for research service providers and their clients and could affect state revenue collections.

Sentiment

The bill appears to have received strong bipartisan support and little visible opposition. It passed the Assembly 89-7 and the Senate 32-1, indicating broad agreement that the tax exemption should be extended to contract research services. The absence of committee transcript material suggests there was no recorded public controversy in the available materials.

Contention

The main policy issue is the scope of the tax exemption: the bill extends it beyond research performed directly by a customer’s employees to research performed by outside contractors on the customer’s behalf. Supporters likely view this as a modernization of the tax code and a way to encourage research activity and business investment in Wisconsin. Any opposition appears limited, but the small number of negative votes suggests some concern may have existed about narrowing the tax base or creating a special tax preference for a specific industry.