Also known as the Manufacturers Tax Credit, the Manufacturing & Agriculture Credit (MAC) was established under the 2011-13 state budget with a phase-in period beginning in the 2013 tax year.
The credit is designed to negate most state tax liability for the income derived from production in Wisconsin for manufacturers and agricultural producers, the two largest sectors of the state economy. Having such a powerful incentive will encourage manufacturers to expand in Wisconsin or locate production facilities to the state.
The MAC can be claimed by pass-through entities and C corporations which own or rent real property or improvements in Wisconsin that are assessed as manufacturing or agricultural property and used by the claimant to manufacture or grow, produce, or extract tangible personal property.
The MAC phases in at the following levels:
Tax Year Credit
The MAC is anticipated to save manufacturers and agricultural producers around $31 million in 2013-14 and $70 million in 2014-15.
The 2013-15 state budget did make an adjustment to the MAC, limiting the credit to the amount of income or franchise tax paid on the income on which the credit is based.
As the credit phases-in over the next four years, its value in encouraging competitiveness and economic growth in Wisconsin will continue to grow.