SB 696

This bill makes a number of changes to the early stage seed investment tax

credit and the angel investment tax credit program, including the following:

1. Under current law, a taxpayer may claim an early stage seed investment tax

credit equal to 25 percent of the taxpayer's investment paid to a fund manager that

the fund manager invests in a qualified new business venture, as certified by the

Wisconsin Economic Development Corporation (WEDC). Also, under current law, a

taxpayer may claim an angel investment tax credit equal to 25 percent of the

taxpayer's bona fide angel investment in a qualified new business venture. Under

the bill, with regard to the first $1,000,000 invested by the taxpayer, a taxpayer may

claim an early stage seed investment credit or an angel investment credit equal to

40 percent of the taxpayer's investment and, with regard to any amount invested

after that first $1,000,000, the taxpayer may claim a credit equal to 25 percent of the

taxpayer's investment.

2. Under current law, WEDC may certify a business as a qualified new business

venture if, among other eligibility criteria, the business is not primarily engaged in

real estate development, insurance, banking, lending, lobbying, political consulting,

professional services provided by attorneys, accountants, business consultants,

physicians, or health care consultants, wholesale or retail trade, leisure, hospitality,

transportation, or, with one exception, construction. Under the bill a business is

eligible for certification as a qualified new business venture if, in addition to the

other eligibility criteria established under current law, the business is not primarily

engaged in lobbying or political consulting.

3. Under current law, a person awarded an early stage seed investment tax

credit may sell or otherwise transfer the credit to another Wisconsin taxpayer, but

a person awarded the angel investment tax credit may not transfer that credit to

another person. Under the bill, a person awarded the angel investment tax credit

may sell or otherwise transfer the credit to another Wisconsin taxpayer.

4. Under current law, in determining whether to certify an investment fund

manager for purposes of the early stage seed investment tax credit, WEDC is

required to consider, among other factors, the expected level of investment in the

investment fund to be managed by the investment fund manager. The bill prohibits

WEDC from considering that factor.

The bill also creates a tax credit equal to 25 percent of the sales price of goods

and services that the taxpayer purchases from a qualified new business venture, as

certified by WEDC. The maximum amount that a taxpayer may claim as a credit for

such purchases in a taxable year is $125,000. Only corporations and insurers may

claim the credit. If the amount of the credit exceeds the taxpayer's tax liability, the

taxpayer does not receive a refund, but, instead, may claim the amount of any unused

credit in subsequent taxable years.