AB 1217

This bill creates tax incentives related to businesses in this state converting to

an employee ownership business structure.

Employee ownership conversion costs tax credit

Under the bill, the Wisconsin Economic Development Corporation may certify

a business to claim a nonrefundable income tax credit for an amount equal to 70

percent of costs related to converting the business to a worker-owned cooperative or

50 percent of the costs related to converting the business to an employee ownership

trust or an employee stock ownership plan. The credit is limited to a maximum

amount of $100,000. A business is qualified to receive the credit if the business is

subject to income and franchise taxes in this state and, at the time the business

receives the credit, is not owned in whole or in part by an employee ownership trust,

does not have an employee stock ownership plan, and is not, in whole or in part, a

worker-owned cooperative.

Capital gain exemption

The bill also creates an individual income tax subtraction and a corporate

income and franchise tax exemption for the amount of the capital gain realized from

the transfer of ownership of a business in this state to an employee stock ownership

plan, a worker-owned cooperative, or an employee ownership trust. Under the bill,

the subtraction or exemption may not be claimed for a taxable year unless the

business whose transfer results in a capital gain has entered a labor peace agreement

with the labor organization representing the employees of the business for that

taxable year.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.