An Act to renumber 238.308 (1) (a); to amend 71.07 (3y) (a) 2., 71.07 (3y) (b) 6., 71.28 (3y) (a) 2., 71.28 (3y) (b) 6., 71.47 (3y) (a) 2., 71.47 (3y) (b) 6., 238.308 (2) (a) 1. and 238.308 (4) (a) 6.; to create 238.308 (1) (ag) and 238.308 (2) (d) of the statutes; Relating to: making certain child care expenditures eligible for the business development tax credit. (FE)
Summary
SB291 expands Wisconsin’s business development tax credit to cover a broader range of employer child care costs. Under current law, the refundable credit is generally tied to capital expenditures for establishing an employee child care program. This bill would allow a credit of up to 15 percent of a business’s costs incurred to provide child care services for employees, including not only startup capital costs but also operating expenses, employee reimbursements for child care, purchases or reservations of child care slots, employer contributions to dependent care flexible spending accounts, and other related expenses that facilitate child care access.
The bill also updates the credit’s administration so the Wisconsin Economic Development Corporation (WEDC) may certify certain nonprofit 501(c)(3) entities for the credit when they incur qualifying child care service costs for employees. It makes conforming changes across the income and franchise tax provisions that reference the business development tax credit and applies the changes to taxable years beginning after December 31, 2024.
Impact
SB291 would broaden the scope of eligible expenditures under Wisconsin’s business development tax credit and thereby expand the number and type of employers that can claim the credit for child care-related benefits. It amends multiple sections of the statutes governing individual income tax, corporate income/franchise tax, and the business development tax credit program, while also redefining qualifying child care costs in statute. The bill would likely increase state tax expenditures and could encourage employers to subsidize child care access, reserve child care slots, or operate on-site or affiliated child care programs for employees.
Sentiment
The voting history suggests the bill had meaningful legislative support but was also controversial. It passed the Senate 19-14 and the Assembly 63-31, indicating a partisan or at least divided response rather than broad consensus. The bill ultimately became law only after overcoming a gubernatorial objection, which signals that supporters viewed it as an important workforce and family-support measure while opponents likely questioned its fiscal cost, tax-credit structure, or policy approach.
Contention
The main point of contention appears to be whether the state should use a refundable business tax credit to subsidize employer-provided child care and related benefits. Supporters likely emphasized workforce retention, recruitment, and reducing child care barriers for working parents, while critics may have focused on the cost to the state treasury, the breadth of qualifying expenses, and whether the credit should extend beyond direct capital investments to ongoing operating and reimbursement costs. The inclusion of nonprofit entities as eligible recipients may also have raised questions about program scope and administration.
Crossfiled
An Act to renumber 238.308 (1) (a); to amend 71.07 (3y) (a) 2., 71.07 (3y) (b) 6., 71.28 (3y) (a) 2., 71.28 (3y) (b) 6., 71.47 (3y) (a) 2., 71.47 (3y) (b) 6., 238.308 (2) (a) 1. and 238.308 (4) (a) 6.; to create 238.308 (1) (ag) and 238.308 (2) (d) of the statutes; Relating to: making certain child care expenditures eligible for the business development tax credit. (FE)