An Act to create 71.05 (1) (j), 71.26 (1) (j), 71.34 (1k) (q) and 71.45 (1) (dp) of the statutes; Relating to: an income and franchise tax exemption for broadband expansion grants and for federal high-cost program funding for broadband expansion. (FE)
SB176 creates a new income and franchise tax credit for recipients of broadband expansion funding in Wisconsin. The credit applies to individuals and certain pass-through entities for taxable years beginning after December 31, 2025, and before January 1, 2031, and is equal to 6.32% of qualified broadband expansion funding received during the taxable year, limited to the amount of tax otherwise due. Qualified funding includes grants from the state, local governments, tribal governments, the federal government, or their authorized representatives, as well as funding from FCC high-cost programs under 47 U.S.C. 254 for broadband expansion in Wisconsin.
The bill adds parallel provisions across the individual income tax, corporate income/franchise tax, and insurance company tax chapters, and it makes conforming changes so the new credit is recognized in the state tax code and properly handled for partnerships, tax-option corporations, and limited liability companies. It also incorporates existing administrative rules used for other credits, and it prevents a taxpayer from claiming the credit for amounts already claimed as certain exemptions under existing law.
The bill’s practical effect is to reduce state tax liability for entities and individuals that receive broadband expansion grants or federal high-cost broadband funds, thereby subsidizing broadband buildout projects through the tax code. It does not create the broadband grants themselves; rather, it provides a tax offset tied to the receipt of those funds, which may encourage participation in broadband deployment programs and lower the net cost of expansion projects.
The available voting history suggests the bill had meaningful legislative support but also notable opposition. It passed the Senate and Assembly on recorded votes, and the Senate later concurred in the Assembly substitute amendment, but the bill ultimately failed to become law because it did not survive the governor’s objections under Joint Rule 82. The absence of committee transcript material limits insight into detailed floor or committee arguments.
The main point of contention appears to be whether the state should use tax expenditures to support broadband expansion funding, especially given the fiscal impact and the bill’s interaction with existing exemptions. Supporters likely viewed the measure as a targeted incentive for rural and underserved broadband deployment, while opponents likely questioned the need for a tax credit layered on top of grant funding or objected to the revenue loss and policy design.
SB176 would amend Wisconsin’s individual income tax, corporate income/franchise tax, and insurance company tax statutes to create a new broadband expansion funding credit and to add conforming pass-through and administrative provisions. It would apply to qualifying broadband grants and FCC high-cost program funding received in taxable years beginning after December 31, 2025, and before January 1, 2031, reducing state tax collections for eligible recipients and their owners or shareholders where applicable.
The legislative record shows mixed but substantial support: the bill passed both chambers on recorded votes and the Senate concurred in an Assembly substitute amendment. However, the bill ultimately failed after the governor’s objections, indicating executive opposition and enough disagreement to prevent enactment over that objection. Overall, the sentiment appears favorable among many legislators as a broadband expansion incentive, but not unanimous.
The likely controversy centered on whether a tax credit is the right mechanism to support broadband expansion funding, and whether the state should forgo revenue for recipients already receiving public or federal broadband dollars. Another point of tension is the bill’s interaction with existing exemptions and its application through pass-through entities, which can complicate administration and distribution of the benefit. The governor’s objection suggests concern about policy design, cost, or redundancy with existing broadband funding programs.