Senate Bill 21 aims to promote employee ownership in Wisconsin by introducing tax incentives and an educational outreach program. The bill establishes a nonrefundable income tax credit for businesses converting to employee ownership structures, such as worker-owned cooperatives or employee stock ownership plans (ESOPs). Specifically, businesses can claim a credit of 70% of conversion costs for cooperatives and 50% for ESOPs, with a maximum limit of $100,000. Additionally, the bill creates a capital gains deduction for individuals and corporations transferring ownership of a business to these employee ownership structures, provided that the employee ownership entity holds more than 50% of the business.

Furthermore, the bill mandates the Department of Revenue (DOR) to develop an outreach and education program to facilitate the transition to employee ownership. This program will include technical assistance and training for businesses looking to convert to employee ownership models. The DOR is also directed to apply for federal grants to support this initiative. The bill includes several amendments to existing statutes, such as the addition of new sections related to the employee ownership conversion costs credit and the capital gains deduction, while also updating existing provisions to incorporate these changes.

Statutes affected:
Bill Text: 71.05(6)(a)15, 71.05, 71.21(4)(a), 71.21, 71.26(2)(a)4, 71.26