Two New Initiatives Aim to ‘Innovate’ and ‘Accelerate’ Wisconsin

Gov. Jim Doyle announced two new initiatives focusing on investments in manufacturing R&D and increasing angel and venture capital investment to grow new businesses.

 

With the goal of remaining globally competitive, the governor’s new Innovate Wisconsin initiative offers tax incentives to encourage manufacturers to increase R&D. Specifically, the plan calls for new ‘Innovate’ tax credits that are given to companies who increase spending on R&D by 25 percent over their three-year average. Companies would receive a $1 tax credit for every $1 spent above this threshold, which is capped at 50 percent of its tax liability, according to the governor’s office. Additionally, the plan calls for machines and equipment used in manufacturing R&D to be exempt from sales and property tax.

 

Gov. Doyle also announced the creation of Accelerate Wisconsin, an initiative to encourage new start-up businesses through grants, loans and tax credits. This initiative builds upon Act 255, a measure to expand angel and seed tax credits by $5 million, which was widely debated but ultimately approved during last year’s legislative session (see the Oct. 31, 2007 issue of the Digest).  By 2015, the total amount of tax credits is expected to reach $100 million, leveraging a minimum of $400 million in private investment, according to the governor’s office. The Accelerate Wisconsin initiative also comprises three new components:

• The Accelerate Grant and Loan Program will double funding for current technology grants and loans by directing $5 million annually to provide seed money to start-up companies and small businesses and supply the matching funds required for federal research grant applications;
• The Capital Gains Re-Investment Initiative will allow individuals a limited 100 percent capital gains exclusion of up to $10 million for long-term capital gains reinvested in qualifying Wisconsin businesses; and,
• Accelerating Capital Investment to New Start-ups by raising the current cap of $1 million in tax-creditable angel investment per business to $4 million. This proposal increases flexibility in allowing new start-up companies to receive financing from any combination of angel or venture investors to the maximum of $4 million in total tax-creditable investment.

Both initiatives are part of the next phase of the governor’s Grow Wisconsin Agenda, a plan to jumpstart the state’s economy through investments in TBED (see the Sept. 19, 2003 issue of the Digest). The plan was updated and expanded in 2005 to include a number of additional investments, including seed funding for the Biomedical Technology Alliance to promote research, tax incentives for businesses to locate high-wage jobs in distressed areas, establishing a Manufacturing Competitiveness Council, and increasing the minimum number of math and science credits required for high school graduation (see the Sept. 26, 2005 issue of the Digest). 

 

More information on the Innovate Wisconsin initiative is available from the governor’s press office at: http://www.wisgov.state.wi.us/journal_media_detail.asp?locid=19&prid=3081

 

For more information on Accelerate Wisconsin, please visit: http://www.wisgov.state.wi.us/journal_media_detail.asp?locid=19&prid=3078