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Extending the R&D Tax Credit to Pass-Through Entities

Under previous Wisconsin law, only C corporations were eligible to claim the federal research & development expense credit at the state level.
The 2013-15 state budget changes that to allow pass-through entities like LLCs, S corporations, and partnerships to also claim the credit through the individual income tax.  As most businesses are organized as pass-through entities, this change will benefit a tremendous number of Wisconsin companies that already receive the federal credit but have been excluded from receiving the credit by the state.  As states contend with each other to lure business investment, extending this credit to pass-through entities helps keep Wisconsin competitive.
Wisconsin also has a separate research facility credit that will also be extended to pass-through entities in 2013, but the research facility credit is eliminated under the state budget in 2014.




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