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Q: How does a business receive Technology Zone Tax Credits? A:
2. If a match exists between the company’s project and the Technology Zone program, the business will be encouraged to complete Department of Commerce’s Prospect Data Sheet (PDS) and a Technology Zone Addendum (TZA). Application assistance will be available from the local Zone Representative(s) and/or Commerce staff. 3. The Capital Ideas Technology Zone governing board will review the completed PDS / TZA and recommend a total, three-year Tax Credit allocation to Commerce. This allocation will be based on the total Wisconsin income, sales and property tax payments projected by the business over a three-year period. Other factors such as job creation, wages, investment, the nature of technology involved, the project’s impact on other high-technology-related spin-offs / linkages and the Tax Credit program’s impact on the company’s project will also be considered. 4. Commerce staff will review the recommendations of the local zone governing board and then forward their decision to the Department Secretary for final Certification. 5 If approved, the Secretary of Commerce will notify the business - in writing - of its designation as a Wisconsin Technology Zone business. 6. Tax Credits are earned by submitting annual project reports to Commerce. Tax Credit verification forms are then attached to the business’ Wisconsin Corporate Income Tax return. Q: Will a business always receive its full allocation of Tax Credits? A: A business must show proof of its Wisconsin income, property, and sales tax payments on an annual basis. The Tax Credits that are earned are based on the actual amount of taxes paid. Therefore, the Tax Credits earned may be lower than the allocation, which is based on the tax projections provided by the business. Q: How long can the business participate in the Technology Zone Program? A: By statute, businesses are designated as Tech Zone participants for three consecutive years. At the end of that period, the local Zone representative may recommend that the Department of Commerce extend the business’ designation for an additional two years, provided the business meets its job creation and investment thresholds / projections. If a company’s current tax situation prevents it from initially taking advantage of its Tax Credit allocation, the Technology Zone program allows for a 15-year carry forward provision. Q: How is the credit calculated? A: The local Technology Zone establishes a base tax liability, using the applicant’s projected three-year Wisconsin income, sales and property tax payments. 2. 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 3. 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. 4. 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. 5. The Capital Ideas Technology Zone Board may adjust projects upward by one Tier under if they meet special objectives of the Zone.
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