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 71.07 (12), 71.10 (4) (gm), 71.28 (12), 71.30 (3) (dw), 71.47 (12) and 71.49 (1) (dw) of the statutes; Relating to: a sustainable aviation fuel production tax credit. (FE)
SB284 creates a new Wisconsin income and franchise tax credit for producing sustainable aviation fuel. Beginning with taxable years after December 31, 2027, eligible claimants could receive a credit of $1.50 per gallon of sustainable aviation fuel produced in Wisconsin during the taxable year, up to the amount of tax owed. The bill defines sustainable aviation fuel as aviation fuel that is at least 90 percent derived from synthetic, renewable, and nonpetroleum sources, and it includes energy crops as a qualifying input.
The bill applies the credit across Wisconsin’s individual income tax, corporate income/franchise tax, and insurance company tax provisions by adding parallel credit sections and corresponding administrative and pass-through rules. It also specifies that if the fuel is derived in part from energy crops, those crops must have been grown in the United States to qualify. Partnerships, LLCs, and tax-option corporations generally cannot claim the credit directly, but may pass the credit through to owners in proportion to their interests.
SB284 would amend multiple chapters of the Wisconsin tax code to add a new production credit and the related conformity, pass-through, and administrative provisions needed to implement it. The bill would affect producers of sustainable aviation fuel in Wisconsin, as well as partnerships, LLCs, tax-option corporations, and taxpayers subject to individual, corporate, or insurance company income/franchise taxes. Because the credit begins in tax year 2028, it would create a future tax expenditure rather than an immediate change in liability.
The available record shows no committee transcript or recorded vote debate, so there is no detailed public discussion to gauge support or opposition. The bill’s introduction by a bipartisan group of senators and representatives suggests at least some cross-party interest in promoting alternative fuel production and related economic development. However, the bill ultimately failed to pass pursuant to Senate Joint Resolution 1, indicating that it did not secure final legislative approval.
The main policy questions likely concern the cost of the credit to state revenues, whether a per-gallon production subsidy is the best way to support sustainable aviation fuel, and how narrowly the credit should be targeted. The bill’s restriction that energy crops used in qualifying fuel must be grown in the United States may also reflect concern about supply-chain sourcing and domestic agricultural benefits. Because no transcripts are available, it is not possible to identify specific legislators or stakeholder groups raising objections, but the fiscal impact and eligibility rules are the most likely points of contention.