A bill to eliminate fees for foreign C Corporations headquartered in Wisconsin was signed into law Wednesday by Gov. Scott Walker.
Foreign C Corporations are often organized in another state for tax or legal purposes, but operate in Wisconsin. They are charged $100 for a certificate of authority to transact business in Wisconsin, plus $3 for every $1,000 beyond $60,000 it deploys in the state. They also must file an annual report with the Department of Financial Institutions and if it withdraws, a certificate of withdrawal, for additional fees.
Under the new law, a foreign corporation that is a Qualified New Business Venture will not have to pay the additional fees based on the capital deployed in the state, and will pay one standard flat fee for each of the annual report and the withdrawal.
The Wisconsin Technology Council supported the passage of the bill, since the fee applied to angel and venture investors.
“Like many young companies in other states, Wisconsin companies often organize as Delaware C Corps because of that state’s expedited and transparent business law system,” said Tom Still, president of the Wisconsin Technology Council. “Those companies hire workers, make products and otherwise do business in Wisconsin. They’re ‘foreign’ only in the sense of how any internal business disputes would be adjudicated.”
Another entrepreneurship-related bill passed in the session was Assembly Bill 489, which expands eligibility for tax credits on angel and early-stage seed investments through the WEDC’s Qualified New Business Venture program. Currently, WEDC can certify a QNBV if it meets certain requirements, including having received $8 million or less in investments that qualify for those tax credits. The bill would have raised the threshold to $12 million.
But two other entrepreneurship and innovation bills did not gain passage as the state Legislature wrapped up its session. The following bills were not passed:
- Senate Bill 525, which would have created a state innovation fund administered by the Wisconsin Economic Development Corp. The money for the fund would have come from withholding tax surplus. The WEDC would have established an 11-member Innovation Fund Council and used interest earnings from the fund to: make grants to Wisconsin businesses to develop or deploy new technologies, components, systems or processes that solve problems identified by WEDC or problems faced by a large portion of the population; make grants to early-stage companies for rapid prototyping and pilot testing; and make payments under contracts with industry cluster partnerships.
- Assembly Bill 40/Senate Bill 16, which would have authorized the WEDC to award an entrepreneurial assistance grant of up to $3,000 to a new business for expenses related to hiring a paid college student intern who studies business, engineering, IT or a similar field. The bill allocated $125,000 for the program. If institutions of higher education had at least three students participating in the program and created a program to support the internships, WEDC would have been able to grant another $25,000 to the institution.
