Taxes and Economic Development

The importance of agriculture in Wisconsin shows itself not just on our state’s license plates, but also in our state’s Constitution – specifically, Article VIII, Section 1, which allows agricultural land to be taxed differently than other types of land. This issue brief summarizes key concepts relating to the classification of agricultural land for property tax assessment purposes and gives an overview of recent Wisconsin Supreme Court decisions that further refine these concepts.

The Wisconsin Economic Development Corporation (WEDC), a semi-public corporate entity created in
the 2011 Legislative Session to replace the former state Department of Commerce, is the state entity
primarily responsible for economic development in Wisconsin. This issue brief provides an overview of
WEDC’s structure and duties, certain grant and loan programs, and evaluations of those programs.

Wisconsin uses a variety of taxing mechanisms to collect revenue for the state and local
governments. Primarily, tax revenues in Wisconsin come from property tax, income tax, and
sales tax. Excise tax and occupational tax, real estate transfer fees, and other municipal taxes
and fees also generate revenue for the state and local governments. This information
memorandum provides an overview of major Wisconsin taxes and how the state and local
governments administer those taxes.

Although “economic development” encompasses various approaches to spur economic growth,
tax incentives have been a major focus of legislative activity in this area. Several state tax credit
programs offer incentives to businesses for activities such as job creation, business relocation or
expansion, capital investment, and production.

On behalf of the State of Wisconsin, Governor Walker executed a memorandum of
understanding with Hon Hai Precision Industry Company, Ltd., also known as “Foxconn
Technology Group” (and commonly referred to as “Foxconn”), on July 27, 2017, to outline terms
and responsibilities “which, if achieved, would result in a definitive agreement and [Foxconn]
locating” a new fabrication facility in Wisconsin.

Among other terms, the Governor agreed that the state would immediately pursue legislation to
create a special tax credit zone for the project and make specified other changes to current law.
As part of a special session on economic development, the Assembly Committee on Organization
subsequently introduced a bill that makes changes relating to the terms outlined in the
memorandum of understanding, together with other changes to current law.

This information memorandum summarizes the legislation and provides relevant background
information. For other summaries of the legislation, see the analysis of the bill by the Legislative
Reference Bureau and a memorandum on LRB-4050/1, prepared by the Legislative Fiscal
Bureau.

In Wisconsin, the Legislature must generally pass a budget every two years in order to expend
revenues for continuing state government operations. This information memorandum provides
an overview of the budget process in order to assist readers in understanding the format and
timeline of the budget process. It also provides a brief introduction of the veto process and key
concepts associated with the state budget, including nonbudget fiscal bills.