2025 - 2026 LEGISLATURE
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2025 SENATE BILL 204
April 16, 2025 - Introduced by Senators TESTIN and FEYEN, cosponsored by
Representatives MOSES, ZIMMERMAN, BEHNKE, CALLAHAN, GOODWIN,
GUNDRUM and SWEARINGEN. Referred to Committee on Agriculture and
Revenue.
AN ACT to amend 71.05 (6) (a) 15., 71.10 (4) (i), 71.21 (4) (a), 71.21 (6) (d) 3.,
71.26 (2) (a) 4., 71.30 (3) (f), 71.34 (1k) (g), 71.365 (4m) (d) 2., 71.45 (2) (a) 10.
and 71.49 (1) (f); to create 20.835 (2) (de), 71.07 (12), 71.28 (12), 71.47 (12) and
73.03 (78) of the statutes; relating to: creating a video game production tax
credit and making an appropriation.
Analysis by the Legislative Reference Bureau
This bill creates a refundable video game production income and franchise tax
credit. The credit is equal to the sum of the following: 1) 30 percent of the eligible
wages paid by the claimant directly relating to developing, producing, or creating a
video game product; and 2) 30 percent of the claimant[s eligible expenditures
directly relating to developing, producing, or creating a video game product. Under
the bill, Xvideo game productY means, subject to certain exceptions, an electronic
game developed for commercial distribution and entertainment that involves
interaction with a used interface to generate visual feedback on a video device.
XVideo game productY does not include social media, gambling products, or products
with obscene content. The bill also defines Xeligible expendituresY as expenditures
directly relating to developing, producing, or creating a video game product but
excludes various specified expenditures, such as payments for royalties, capital
expenditures, management and administrative expenses, marketing expenses, and
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interest. To claim the credit for a tax year, a person must file an application with
the Department of Revenue and receive a certificate of eligibility for the credit. To
receive a certificate, an applicant must submit an audit of its eligible expenditures
to DOR. The credit under the bill is refundable, which means that if the credit
exceeds the claimant[s tax liability, the claimant will receive the difference as a
refund check.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SECTION 1. 20.835 (2) (de) of the statutes is created to read:
20.835 (2) (de) Video game production credit. A sum sufficient to make the
payments under ss. 71.07 (12), 71.28 (12), and 71.47 (12).
SECTION 2. 71.05 (6) (a) 15. of the statutes is amended to read:
71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm),
(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5i), (5j), (5k),
(5r), (5rm), (6n), and (10), and (12) and not passed through by a partnership, limited
liability company, or tax-option corporation that has added that amount to the
partnership[s, company[s, or tax-option corporation[s income under s. 71.21 (4) or
71.34 (1k) (g).
SECTION 3. 71.07 (12) of the statutes is created to read:
71.07 (12) VIDEO GAME PRODUCTION CREDIT. (a) Definitions. In this
subsection:
1. XClaimantY means a person certified under s. 73.03 (78).
2. XEligible expendituresY means amounts paid by the claimant directly
relating to qualifying activities in this state, excluding any of the following:
a. Wages.
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b. Expenditures used to claim another credit under this chapter.
c. Amounts paid to a person certified to receive a credit under this subsection
or s. 71.28 (12) or 71.47 (12).
d. Amounts paid to persons as a result of their participation in profits from
video game production, such as commissions, royalties, or profit-sharing
agreements.
e. Amounts paid for capital expenditures, such as buildings and equipment.
f. Amounts paid to purchase a copyright, trademark, or tradename.
g. Amounts paid for management or other administrative activities.
h. Amounts paid for marketing, promotion, or distribution.
i. Amounts paid for food or entertainment.
j. Interest paid on loans or other credit arrangements.
3. XEligible wagesY means wages paid by the claimant directly relating to
qualifying activities in this state.
4. XQualifying activitiesY means developing, producing, or creating a video
game product or platform.
5. XVideo game product or platformY means an electronic game developed for
commercial distribution and entertainment that involves interaction with a user
interface to generate visual feedback on a video device. XVideo game product or
platformY does not include any of the following:
a. A product or platform that contains content in violation of s. 944.21.
b. A product or platform designed for political, religious, or educational
purposes.
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c. A product or platform regulated under chs. 562 to 569.
d. A product or platform designed to provide information about one or more
individuals or businesses, such as marketing and promotional websites or
microsites.
e. A product or platform designed for social media or interpersonal
communications, such as podcasting, interactive advertising, journalism, video
conferencing, wireless telecommunications, text-based channels, chat rooms, or
broadcast or streamed viewing enhancements.
f. A product or platform designed to stream linear media such as audio, video,
or pictures.
g. Small-scale electronic games embedded and used exclusively in advertising.
6. XWagesY means wages, as defined in s. 71.63 (6), that are subject to
withholding under subch. X and for which a statement under s. 71.65 (1) is
furnished.
(b) Filing claims. Subject to the limitations provided in this subsection, for
taxable years beginning after December 31, 2024, a claimant may claim as a credit
against the tax imposed under s. 71.02 any of the following amounts:
1. An amount equal to 30 percent of the eligible wages paid by the person in
the taxable year.
2. An amount equal to 30 percent of the eligible expenditures incurred by the
claimant in the taxable year.
(c) Limitations. 1. No credit may be allowed under this subsection unless the
claimant files an application with the department, at the time and in the manner
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prescribed by the department, and the department approves the application. The
claimant shall submit a copy of the approved application with the claimant[s
return.
2. No credit may be allowed under this subsection unless the claimant retains
at the claimant[s sole expense a certified public accountant licensed under ch. 442
to review and certify to the department the total eligible expenditures incurred and
total eligible wages paid in the taxable and to conduct the audit required under s.
73.03 (78) (c). No audit of a claimant required under s. 73.03 (78) (c) may be
performed by a certified public accountant that is part of an accounting entity that
is not determined by the department to be independent of the claimant, consistent
with s. 442.10 and as provided in the code of professional conduct of the American
Institute of Certified Public Accountants, or its successor organization, or as
otherwise determined by the department. The certified public accountant shall do
all of the following:
a. Conduct the audit required under s. 73.03 (78) (c) according to any rules
promulgated by the department.
b. Verify each reported expenditure that is included in the audit and identify
and exclude each expenditure that does not satisfy this subsection.
3. Eligible expenditures incurred and eligible wages paid by a tax-option
corporation, partnership, or limited liability company that is treated as a
partnership may be claimed as a credit under this subsection by that corporation[s
shareholders, that partnership[s partners, or that limited liability company[s
members who are residents of this state and who otherwise qualify under this
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subsection, unless the tax-option corporation, partnership, or limited liability
company has made an election under s. 71.21 (6) (a) or 71.365 (4m) (a).
4. If a tax-option corporation, partnership, or limited liability company makes
an election under s. 71.21 (6) (a) or 71.365 (4m) (a), that tax-option corporation,
partnership, or limited liability company may claim the credit under this
subsection.
(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the
credit under s. 71.28 (4), applies to the credits under this subsection.
2. If the allowable amount of the claim under par. (b) exceeds the tax
otherwise due under this chapter or no tax is due under this chapter, the amount of
the claim not used to offset the tax due shall be certified by the department of
revenue to the department of administration for payment by check, share draft, or
other draft drawn from the appropriation account under s. 20.835 (2) (de).
Notwithstanding s. 71.82 (1) (b), no interest shall be added to amounts certified
under this subdivision.
SECTION 4. 71.10 (4) (i) of the statutes is amended to read:
71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland
preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and
beyond under s. 71.613, homestead credit under subch. VIII, jobs tax credit under s.
71.07 (3q), business development credit under s. 71.07 (3y), research credit under s.
71.07 (4k) (e) 2. a., veterans and surviving spouses property tax credit under s.
71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), electronics and
information technology manufacturing zone credit under s. 71.07 (3wm), earned
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income tax credit under s. 71.07 (9e), video game production credit under s. 71.07
(12), estimated tax payments under s. 71.09, and taxes withheld under subch. X.
SECTION 5. 71.21 (4) (a) of the statutes is amended to read:
71.21 (4) (a) The amount of the credits computed by a partnership under s.
71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
(5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10), and (12) and passed through to
partners shall be added to the partnership[s income.
SECTION 6. 71.21 (6) (d) 3. of the statutes is amended to read:
71.21 (6) (d) 3. Except as provided in s. 71.07 (7) (b) 3. and (12) (c) 4., the tax
credits under this chapter may not be claimed by the partnership.
SECTION 7. 71.26 (2) (a) 4. of the statutes is amended to read:
71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5g), (5i), (5j), (5k), (5r),
(5rm), (6n), and (10), and (12) and not passed through by a partnership, limited
liability company, or tax-option corporation that has added that amount to the
partnership[s, limited liability company[s, or tax-option corporation[s income under
s. 71.21 (4) or 71.34 (1k) (g).
SECTION 8. 71.28 (12) of the statutes is created to read:
71.28 (12) VIDEO GAME PRODUCTION CREDIT. (a) Definitions. In this
subsection:
1. XClaimantY means a person certified under s. 73.03 (78).
2. XEligible expendituresY means amounts paid by the claimant directly
relating to qualifying activities in this state, excluding any of the following:
a. Wages.
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b. Expenditures used to claim another credit under this chapter.
c. Amounts paid to a person certified to receive a credit under this subsection
or s. 71.07 (12) or 71.47 (12).
d. Amounts paid to persons as a result of their participation in profits from
video game production, such as commissions, royalties, or profit-sharing
agreements.
e. Amounts paid for capital expenditures, such as buildings and equipment.
f. Amounts paid to purchase a copyright, trademark, or tradename.
g. Amounts paid for management or other administrative activities.
h. Amounts paid for marketing, promotion, or distribution.
i. Amounts paid for food or entertainment.
j. Interest paid on loans or other credit arrangements.
3. XEligible wagesY means wages paid by the claimant directly relating to
qualifying activities in this state.
4. XQualifying activitiesY means developing, producing, or creating a video
game product or platform.
5. XVideo game product or platformY means an electronic game developed for
commercial distribution and entertainment that involves interaction with a user
interface to generate visual feedback on a video device. XVideo game product or
platformY does not include any of the following:
a. A product or platform that contains content in violation of s. 944.21.
b. A product or platform designed for political, religious, or educational
purposes.
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c. A product or platform regulated under chs. 562 to 569.
d. A product or platform designed to provide information about one or more
individuals or businesses, such as marketing and promotional websites or
microsites.
e. A product or platform designed for social media or interpersonal
communications, such as podcasting, interactive advertising, journalism, video
conferencing, wireless telecommunications, text-based channels, chat rooms, or
broadcast or streamed viewing enhancements.
f. A product or platform designed to stream linear media such as audio, video,
or pictures.
g. Small-scale electronic games embedded and used exclusively in advertising.
6. XWagesY means wages, as defined in s. 71.63 (6), that are subject to
withholding under subch. X and for which a statement under s. 71.65 (1) is
furnished.
(b) Filing claims. Subject to the limitations provided in this subsection, for
taxable years beginning after December 31, 2024, a claimant may claim as a credit
against the tax imposed under s. 71.23 any of the following amounts:
1. An amount equal to 30 percent of the eligible wages paid by the person in
the taxable year.
2. An amount equal to 30 percent of the eligible expenditures incurred by the
claimant in the taxable year.
(c) Limitations. 1. No credit may be allowed under this subsection unless the
claimant files an application with the department, at the time and in the manner
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prescribed by the department, and the department approves the application. The
claimant shall submit a copy of the approved application with the claimant[s
return.
2. No credit may be allowed under this subsection unless the claimant retains
at the claimant[s sole expense a certified public accountant licensed under ch. 442
to review and certify to the department the total eligible expenditures incurred and
total eligible wages paid in the taxable and to conduct the audit required under s.
73.03 (78) (c). No audit of a claimant required under s. 73.03 (78) (c) may be
performed by a certified public accountant that is part of an accounting entity that
is not determined by the department to be independent of the claimant, consistent
with s. 442.10 and as provided in the code of professional conduct of the American
Institute of Certified Public Accountants, or its successor organization, or as
otherwise determined by the department. The certified public accountant shall do
all of the following:
a. Conduct the audit required under s. 73.03 (78) (c) according to any rules
promulgated by the department.
b. Verify each reported expenditure that is included in the audit and identify
and exclude each expenditure that does not satisfy this subsection.
(d) Administration. 1. Subsection (4) (e), (g), and (h), as it applies to the credit
under sub. (4), applies to the credits under this subsection.
2. If the allowable amount of the claim under par. (b) exceeds the tax
otherwise due under this chapter or no tax is due under this chapter, the amount of
the claim not used to offset the tax due shall be certified by the department of
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revenue to the department of administration for payment by check, share draft, or
other draft drawn from the appropriation account under s. 20.835 (2) (de).
Notwithstanding s. 71.82 (1) (b), no interest shall be added to amounts certified
under this subdivision.
SECTION 9. 71.30 (3) (f) of the statutes is amended to read:
71.30 (3) (f) The total of farmland preservation credit under subch. IX, jobs
credit under s. 71.28 (3q), enterprise zone jobs credit under s. 71.28 (3w), electronics
and information technology manufacturing zone credit under s. 71.28 (3wm),
business development credit under s. 71.28 (3y), research credit under s. 71.28 (4)
(k) 1., video game production credit under s. 71.28 (12), and estimated tax
payments under s. 71.29.
SECTION 10. 71.34 (1k) (g) of the statutes is amended to read:
71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w),
(3wm), (3y), (4), (5), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10), and (12) and
passed through to shareholders.
SECTION 11. 71.365 (4m) (d) 2. of the statutes is amended to read:
71.365 (4m) (d) 2. Except as provided in s. 71.07 (7) (b) 3. and (12) (c) 4., the
tax credits under this chapter may not be claimed by the tax-option corporation.
SECTION 12. 71.45 (2) (a) 10. of the statutes is amended to read:
71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (5g), (5i),
(5j), (5k), (5r), (5rm), (6n), and (10), and (12) and not passed through by a
partnership, limited liability company, or tax-option corporation that has added
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that amount to the partnership[s, limited liability company[s, or tax-option
corporation[s income under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit
computed under s. 71.47 (3), (3t), (4), (4m), and (5).
SECTION 13. 71.47 (12) of the statutes is created to read:
71.47 (12) VIDEO GAME PRODUCTION CREDIT. (a) Definitions. In this
subsection:
1. XClaimantY means a person certified under s. 73.03 (78).
2. XEligible expendituresY means amounts paid by the claimant directly
relating to qualifying activities in this state, excluding any of the following:
a. Wages.
b. Expenditures used to claim another credit under this chapter.
c. Amounts paid to a person certified to receive a credit under this subsection
or s. 71.07 (12) or 71.28 (12).
d. Amounts paid to persons as a result of their participation in profits from
video game production, such as commissions, royalties, or profit-sharing
agreements.
e. Amounts paid for capital expenditures, such as buildings and equipment.
f. Amounts paid to purchase a copyright, trademark, or tradename.
g. Amounts paid for management or other administrative activities.
h. Amounts paid for marketing, promotion, or distribution.
i. Amounts paid for food or entertainment.
j. Interest paid on loans or other credit arrangements.
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3. XEligible wagesY means wages paid by the claimant directly relating to
qualifying activities in this state.
4. XQualifying activitiesY means developing, producing, or creating a video
game product or platform.
5. XVideo game product or platformY means an electronic game developed for
commercial distribution and entertainment that involves interaction with a user
interface to generate visual feedback on a video device. XVideo game product or
platformY does not include any of the following:
a. A product or platform that contains content in violation of s. 944.21.
b. A product or platform designed for political, religious, or educational
purposes.
c. A product or platform regulated under chs. 562 to 569.
d. A product or platform designed to provide information about one or more
individuals or businesses, such as marketing and promotional websites or
microsites.
e. A product or platform designed for social media or interpersonal
communications, such as podcasting, interactive advertising, journalism, video
conferencing, wireless telecommunications, text-based channels, chat rooms, or
broadcast or streamed viewing enhancements.
f. A product or platform designed to stream linear media such as audio, video,
or pictures.
g. Small-scale electronic games embedded and used exclusively in advertising.
6. XWagesY means wages, as defined in s. 71.63 (6), that are subject to
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withholding under subch. X and for which a statement under s. 71.65 (1) is
furnished.
(b) Filing claims. Subject to the limitations provided in this subsection, for
taxable years beginning after December 31, 2024, a claimant may claim as a credit
against the tax imposed under s. 71.43 any of the following amounts:
1. An amount equal to 30 percent of the eligible wages paid by the person in
the taxable year.
2. An amount equal to 30 percent of the eligible expenditures incurred by the
claimant in the taxable year.
(c) Limitations. 1. No credit may be allowed under this subsection unless the
claimant files an application with the department, at the time and in the manner
prescribed by the department, and the department approves the application. The
claimant shall submit a copy of the approved application with the claimant[s
return.
2. No credit may be allowed under this subsection unless the claimant retains
at the claimant[s sole expense a certified public accountant licensed under ch. 442
to review and certify to the department the total eligible expenditures incurred and
total eligible wages paid in the taxable and to conduct the audit required under s.
73.03 (78) (c). No audit of a claimant required under s. 73.03 (78) (c) may be
performed by a certified public accountant that is part of an accounting entity that
is not determined by the department to be independent of the claimant, consistent
with s. 442.10 and as provided in the code of professional conduct of the American
Institute of Certified Public Accountants, or its successor organization, or as
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otherwise determined by the department. The certified public accountant shall do
all of the following:
a. Conduct the audit required under s. 73.03 (78) (c) according to any rules
promulgated by the department.
b. Verify each reported expenditure that is included in the audit and identify
and exclude each expenditure that does not satisfy this subsection.
(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the
credit under s. 71.28 (4), applies to the credits under this subsection.
2. If the allowable amount of the claim under par. (b) exceeds the tax
otherwise due under this chapter or no tax is due under this chapter, the amount of
the claim not used to offset the tax due shall be certified by the department of
revenue to the department of administration for payment by check, share draft, or
other draft drawn from the appropriation account under s. 20.835 (2) (de).
Notwithstanding s. 71.82 (1) (b), no interest shall be added to amounts certified
under this subdivision.
SECTION 14. 71.49 (1) (f) of the statutes is amended to read:
71.49 (1) (f) The total of farmland preservation credit under subch. IX, jobs
credit under s. 71.47 (3q), enterprise zone jobs credit under s. 71.47 (3w), business
development credit under s. 71.47 (3y), research credit under s. 71.47 (4) (k) 1.,
video game production credit under s. 71.47 (12), and estimated tax payments
under s. 71.48.
SECTION 15. 73.03 (78) of the statutes is created to read:
73.03 (78) To implement a program to approve applications for a certificate
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for purposes of ss. 71.07 (12), 71.28 (12), and 71.47 (12). Application shall be made
to the department in each taxable year for which a certificate is desired. The
department may not approve an application unless all of the following apply:
(a) The applicant operates a business in this state and maintains a physical
business location in this state.
(b) The applicant owns a copyright in a video game production or platform, as
defined in s. 71.07 (12) (a) 5., or is actively seeking a copyright in a video game
production or platform.
(c) The applicant provides verification of eligible expenditures incurred and
eligible wages paid to claim the credit under s. 71.07 (12), 71.28 (12), or 71.47 (12)
and submits an audit of such eligible expenditures and eligible wages.
(d) The applicant certifies that the applicant will comply with the
requirements under s. 71.07 (12), 71.28 (12), or 71.47 (12).
(END)
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