WISCONSIN TAX CREDITS: Are you taking full advantage of what’s available?
Here in Wisconsin, manufacturers are getting more tax incentives than ever. Over 2 years ago, Wisconsin passed a law that took effect in 2013 where manufacturers can take special tax credits. In 2013, a 1.875% credit is given on Wisconsin manufacturing profits from any type of entity (whether C or S Corporation, Partnership or Sole Proprietorship). The credit increases in the next few years to 3.75% for 2014, 5.526% for 2015 and 7.5% for 2016 and beyond. With Wisconsin’s top tax rate at 7.65%, this virtually wipes out the Wisconsin income tax on manufacturing profits by 2016.
How do manufacturers qualify for these credits?
The Wisconsin manufacturing credit is not like Wisconsin’s other business tax credits, which usually require submitting an application to Wisconsin before they are taken. This manufacturing credit requires that the business is assessed as a manufacturer and their products are manufactured in Wisconsin. The credit can only be taken against manufacturing profits and it is added back to Wisconsin income in the year after it is taken. It is critical that Wisconsin manufacturers make sure that they are assessed as manufacturers and work proactively with their accountants to claim the maximum credit.
This incentive comes in addition to other Wisconsin credits that expired in 2013 like the Economic Development Credit and the Food & Beverage Processing Credits. There is also the Job Creation Deduction of $2,000/$4,000 for each increased full-time employee.
The credits, deductions and incentives listed above are in addition to Federal tax incentives such as the Research & Development Credit (which expired in 2013 but is expected to be reinstated) and the Domestic Production Activities Deduction (a 9% deduction against manufacturing profits). For 2013, there was also a Section 179 expense election of $500,000 (a write-off of fixed assets) and 50% bonus depreciation (write off 50% and depreciate the balance).
As a manufacturer, there are many tax incentives you can take advantage of. It is important to work with a proactive, qualified tax professional to benefit your company.
SVA Manufacturing & Distribution Industry Services
Innovative ideas for competing — and winning!
SVA’s professionals understand the unique circumstances and dynamics impacting manufacturers and are committed to helping you succeed.
By taking a proactive approach to accounting services and tax planning as well as keeping current on new tax laws and legislation, we are able to identify key opportunities for your business – whether it’s minimizing your current tax liability or planning for future growth and expansion.
Contact us to discover the comprehensive services we offer and how we help your business grow.
Measurable Results.
With support from SVA’s due diligence audit procedures, Sussex Manufacturing was able to obtain financing at a reduced rate, saving between $14,000 – $20,000 per year in interest.
“SVA gave very good assurance that the reports and projections we provided were prepared correctly and the forecasts were right on. Their in-depth analysis was very straight forward, giving the financial institution a higher comfort level and the confidence needed to offer us a better interest rate.”
– Dave Guagliardo, Chief Financial Officer – Sussex Manufacturing
SVA’s Process Improvement Recommendations Helped Urban Manufacturing Save $100,000 in a Single Year.
“Not only did SVA help us save money, they assisted us in changing our culture to one of continuous improvement.”
– Tom Urbanchek, Vice President of Sales – Urban Manufacturing
Colectivo Coffee Roasters (formerly Alterra) realizes $100,000 in tax savings and another $600,000 in cash proceeds by working with SVA.
“We hire professionals who bring knowledge to the table that we don’t have. SVA continuously delivers a well informed, objective perspective we value which makes us continuously evaluate our path.”
– Lincoln Fowler, One of Colectivo’s Founders
262.641.6888 | www.sva.com | Measurable Results.
