How is the credit calculated? || Is there a maximum allocation?

How is the credit calculated?
*Please note that the tax credit allocation formula will be 
changing in December.

  • The local Technology Zone establishes a base tax liability, using the applicant’s projected three-year Wisconsin income, sales and property tax payments.

  • Projects that create or retain jobs with an average wage between $10.30 and $15.44 per hour or provide capital investment that is below the “Average Technology Zone Investment” (currently $500,000), will qualify as a Tier 1 project.  Tier 1 projects may be allocated tax credits based on 50 percent of the Company’s base tax liability, not to exceed the Zone’s maximum tax credit limit of $150,000

  • Projects that create or retain jobs with an average wage between $15.45 and $20.59 per hour and provide a capital investment that is at least 100 percent to 199 percent of the “Average Technology Zone Investment” will qualify as a Tier 2 Project.  Tier 2 Projects may be allocated tax credits based on 75 percent of the Company’s base tax liability, not to exceed the Zone’s maximum tax credit limit of $150,000.

  • Projects that create or retain jobs with an average wage rate that is more than @20.60 per hour and provide capital investment of 200 percent or more of the “average Technology Zone Investment” will qualify as a Tier 3 Project.  Tier 3 Projects may be allocated tax credits based on 100 percent of the Company’s base tax liability, not to exceed the Zone’s maximum tax credit limit o $150,000.

  • The Capital Ideas Technology Zone Board may adjust projects upward by one Tier if they meet special objectives of the Zone. 

 

Maximum Tax Credit allocation per eligible business:

 

A certified high-technology business in a Technology Zone may claim income tax credits in an amount equal to the sum of the real and personal property taxes, income and franchise taxes, and sales and use taxes paid in the taxable year, over three years.

Within the Capital Ideas Technology Zone the maximum recommended Tax Credit allocation, per company, is $150,000.

The $150,000 threshold can be amended and/or surpassed for development projects documenting significant commitments for R&D, capital investment, knowledge-based full-time positions and facility renovation/construction. These projects will be judged on a case-by-case basis, using established State of Wisconsin and local criterion. Administrative Board approval, via a super majority vote, is required to supersede the established threshold.

The Zone’s Average Investment Level threshold is $500,000. To document this investment level, the following inputs are considered eligible factors:

  • Property acquisition, construction and/or facility rehabilitation.

  • Working Capital

  • Human Capital (e.g. salaries paid, training investment, etc.)

  • R&D

  • M&E purchases

  • Capitalized value of plant and equipment leases

(Tax Credit recommendations are based upon State of Wisconsin guidelines, as more fully described within the Tax Credit Allocation Worksheet.)

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