By Samantha A. Fong
On July 3, 2025, Wisconsin Governor Tony Evers signed the biennial state budget for 2025-2027, which amends various tax provisions affecting personal income tax rates, increases the retirement income exclusion, eliminates the sales tax on electricity and natural gas sold for residential consumption, and re-establishes film production tax credits. (L. 2025, S45 (Act 15), effective 07/04/2025, or as otherwise indicated.)
Corporate income.
Film production credits: For taxable years beginning after December 31, 2025, a film production services credit is established that may be claimed against the corporate income tax. The credit includes: (1) an amount equal to 30% of the salary or wages paid by the claimant to its employees in the taxable year for services rendered in the state to produce an accredited production and paid to employees who were residents of the state at the time that they were paid; (2) an amount equal to 30% of the production expenditures paid by the claimant in the taxable year to produce an accredited production; and (3) all sales and use tax paid in the taxable year on the purchase of tangible personal property and taxable services that are used directly in producing an accredited production in the state. “Accredited production” means a film, video, broadcast advertisement, or television production approved by the state film office, for which the aggregate salary and wages included in the cost of the production for the period ending 12 months after the month in which the principal filming or taping of the production begins exceeds $100,000 for a production that is 30 minutes or longer or $50,000 for a production that is less than 30 minutes.
In addition, for taxable years beginning after December 31, 2025, a film production company investment credit is created against the corporate income tax, in an amount that is equal to 30% of the following that the claimant paid in the taxable year to establish a film production company in the state: (1) the purchase price of depreciable, tangible personal property; and (2) the amount expended to acquire, construct, rehabilitate, remodel, or repair real property. The credit may be claimed if the claimant began the physical work of construction, rehabilitation, remodeling, or repair, or any demolition or destruction in preparation for the physical work, after December 31, 2025, or if the completed project is placed in service after December 31, 2025. Partnerships, limited liability companies (LLCs), and tax-option corporations may not claim the credit but partners, members of LLCs, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.
Personal income.
Personal income tax rates: The legislation expands the second individual income tax bracket to tax more income at the 4.4% rate. For individual taxpayers, for taxable years beginning after December 31, 2024, taxable income from $0 to $14,680 will be taxed at a rate of 3.5%; taxable income exceeding $14,680 but not exceeding $50,480 will be taxed at a rate of 4.4%; taxable income exceeding $50,480 but not exceeding $323,290 will be taxed at a rate of 5.3%; and taxable income exceeding $323,290, will be taxed at a rate of 7.65%. For married taxpayers filing jointly, for taxable years beginning after December 31, 2024, taxable income from $0 to $19,580 will be taxed at a rate of 3.5%; taxable income exceeding $19,580 but not exceeding $67,300, will be taxed at a rate of 4.4%; taxable income exceeding $67,300 but not exceeding $431,060, will be taxed at a rate of 5.3%; and taxable income exceeding $431,060, will be taxed at a rate of 7.65%.
For married persons filing separately, for taxable years beginning after December 31, 2024: taxable income from $0 to $9,790 will be taxed at a rate of 3.50%; taxable income exceeding $9,790 but not exceeding $33,650, will be taxed at a rate of 4.4%; taxable income exceeding $33,650 but not exceeding $215,530 will be taxed a rate of 5.3%; and taxable income exceeding $215,530 will be taxed at a rate of 7.65%.
Retirement income exclusion: For taxable years beginning after December 31, 2024, the amount of payments or distributions received each year from a qualified retirement plan under the IRC or from an individual retirement account established under 26 U.S.C. §408 that is excluded from tax is $24,000 for each resident individual, or $48,000 for married joint filers. The individual(s) must be 67 years old before the close of the taxable year to which the subtraction relates. Part-year residents may claim the portion of their income sourced to Wisconsin, calculated by taking the payments or distributions and multiplying the applicable amount by a fraction the numerator of which is the individual’s wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by Wisconsin and the denominator of which is the individual’s total wages, salary, tips, unearned income, and net earnings from a trade or business.
Adoption expenses: For taxable years beginning after December 31, 2024, the legislation increases the deduction for a full-year resident for adoption fees, court costs, or legal fees relating to the adoption of a child, for whom a final order of adoption has been entered, from $5,000 to $15,000.
Credits: For taxable years beginning after December 31, 2025, a film production services credit and film production company investment credit are established that may be claimed against the personal income tax.
Sales tax.
Exemption for electricity and natural gas: Effective October 1, 2025, sales tax on electricity and natural gas sold for residential consumption is eliminated.
Exemption for insurance information products: Effective October 1, 2025, the sales price from the sale of and the storage, use, or other consumption of information products containing reports, statistics, records, or other data used exclusively by an insurance company for purposes of quoting, underwriting, determining insurability, assessing risks, setting rates, or adjusting claims, whether in tangible or digital form, is exempt from tax.
Premier resort areas: Effective January 1, 2026, a political subdivision with a population of not less than 4,000 and not more than 11,000 is permitted to enact an ordinance or adopt a resolution declaring itself to be a premier resort area, even if less than 40% of the equalized assessed value of the taxable property within the political subdivision is used by tourism-related retailers, if the action is approved by a majority of the electors voting on the resolution at a referendum held prior to June 1, 2025.
Property tax.
Effective January 1, 2026, an exemption is established for radio, cellular, and telecommunication towers used exclusively to support equipment that provides telecommunications services, or that is used as digital broadcasting equipment for radio, television, or video services. Effective January 1, 2027, an exemption is created for radio, cellular, and telecommunication towers used by a telephone company.
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