Updates from the 2023–2025 state budget
By Lorenzo Cruz
As the summer of 2023 comes to a close, the Wisconsin Bankers Association (WBA) is pleased to help usher in a number of historic changes for banks across the state. In July, Governor Tony Evers approved Senate Bill 70 as 2023 Wisconsin Act 19 and established Wisconsin’s 2023–2025 budget. As the Association has previously reported, budget negotiations — which included a massive $6.6 billion surplus — have been ongoing for several months. Undoubtedly, the passion demonstrated in the last several decades by banking advocates has led us to this moment. Thank you to those who have committed their time and efforts to ensuring the banking industry remains relevant and thriving for years to come!
The following recaps business-related provisions from Act 19:
- Tax-Exemption for Small Business and Ag Purpose Loans
Act 19 creates a new, historic tax-exemption for banks related to certain business and agricultural lending. Learn more about the new tax-exemption here.
- Largest Investments of $525 Million in Workforce Housing in Wisconsin History
Act 19 provides one-time funding for several new Wisconsin Housing & Economic Development Authority (WHEDA) programs.
- Increased Shared Revenue for Municipalities
Act 19 added aid for municipalities for fiscal year 2024–2025 and represents a 36% increase over current county and municipal aid entitlements.
- Income Tax Reduction for Two Lowest Tax Brackets
Act 19 reduced income tax for the lowest two individual brackets leaving more than $3 billion in the general fund for more income tax cuts or spending.
- Increase in Retailer Vendor Compensation
Act 19 revises section 77.61(4)(c) and increases vendor compensation for retailers. The WBA Government Relations team will continue to monitor this development but are hopeful the vendor compensation increase will reduce an interest in a state credit card interchange fee bill.
- Creates Sales and Use Tax for Equipment or Software Used at Qualified Data Center
Act 19 creates a sales and use tax exemption for equipment or software used for the processing, storage, retrieval, or communication of data at a qualified data center, as certified by the Wisconsin Economic Development Corporation (WEDC).
Personal Property Tax Repealed
Another significant change in tax policy occurred on the personal property front. For several decades, the business community has been working on legislation to eliminate completely the personal property taxes in Wisconsin. Many states have eliminated the personal property tax and Wisconsin was becoming an outlier in that area. WBA was a member of the Coalition to Repeal Wisconsin’s Personal Property Tax which successfully advocated for a legislative solution that fully repealed the personal property tax effective January 2024 in the 2023 Wisconsin Act 21, which was signed by Governor Evers on June 20. The repeal of the personal property tax eliminates an outdated administratively burdensome requirement and saves the business community nearly $200 million annually.
With the state budget behind us, the WBA Government Relations team will shift the focus towards fall/spring floor periods and political fundraising/ grassroots efforts. Despite the huge tax parity victory in the state budget — which was a top priority for WBA — the team is now working on other priorities that include, but are not limited to, financial institutions modernization reform, elder fraud, taxes, privacy, trust code updates, and credit card swipe fees.