Wisconsin Senate Bill SB162

Wisconsin 2023-2024 Regular Session

• Introduced: 4/3/23
• Refer: 4/3/23
• Failed: 4/15/24

Caption

A sole proprietor employee tax credit and granting rule-making authority. (FE)

Impact

If enacted, SB162 would have a significant effect on state tax law by creating a new avenue for sole proprietors to receive financial support through tax credits, thereby promoting job creation within small businesses. This legislation could lead to a more favorable employment landscape by encouraging sole proprietors to expand their workforce, potentially helping the state's economic growth. However, the maximum cumulative amount of credits that can be claimed collectively by all sole proprietors is capped at $20 million per year, meaning that the availability of these credits may be limited based on demand.

Summary

Senate Bill 162 proposes the establishment of a tax credit program specifically for sole proprietors in Wisconsin. The bill aims to incentivize the hiring of full-time employees by allowing sole proprietors to claim a nonrefundable tax credit based on the wages paid to their first eligible employee. The program is administered by the Wisconsin Economic Development Corporation (WEDC), which is responsible for certifying applicants and their claims. Specifically, the legislation outlines a tiered structure for the tax credits over three years based on the employment duration of the eligible employee, with increasing reductions in the percentage of wages covered over that period.

Contention

Discussion around SB162 could center on the implications of such tax incentives for the broader business community and state finances. Advocates may argue that facilitating the hiring process for small businesses is essential for economic recovery, particularly in a post-pandemic environment. Conversely, critics might voice concerns about the fiscal responsibility of providing tax credits that reduce state revenue, questioning whether these measures effectively stimulate the local economy or disproportionately benefit a specific group of business owners without ensuring equitable outcomes.