Also in the Wisconsin budget - other tax write-offs, but nothing for films/TV?

If you're one of the 5 followers of this blog, you know that I like looking at mundane things in state government that seem small and slip by most media in their reporting of bigger issues. And the Legislative Fiscal Bureau ran down some of these as part of the Wisconsin GOP's larger tax motion in last week's wrap-up of work for the Joint Finance Committee.

Deduction for Interest on Commercial Loans. Create an income and franchise tax deduction, beginning in tax year 2023, for the income of a financial institution derived from a commercial loan of $5 million or less provided to a person residing or located in this state and used primarily for a business or agricultural purpose. Estimate reduced income and franchise tax collections of $35,900,000 in 2023-24 and $29,300,000 in 2024-25. Estimate surcharge revenues paid by banks into the economic development fund to decrease by $130,000 annually, beginning in 2024-25. As a result, estimate that amounts appropriated from the economic development fund to the Wisconsin Economic Development Corporation (WEDC) are reduced by $130,000 in 2024-25.

"For the income of a financial institution"? Is this a bailout to banks and credit unions for impending foreclosures and businesses that might go belly-up? And the write-off is $65 million in this budget? Seems like an easy veto target and worthy of exposure about who lobbied to put that in. If it's legit, they can do a separate bill.

This item also came as news to me, but in a good way.

Sales Tax Retailer's Discount. Increase the sales tax retailer's discount rate from 0.5% to 0.75%, and increase the maximum discount a retailer may claim per reporting period from $1,000 to $8,000. Specify that these changes would first apply to sales and use taxes payable on the first day of the third month beginning after publication of the bill. Estimate a reduction in sales tax collections of $15,500,000 in 2023-24 and $21,100,000 in 2024-25.

This is a payment for retailers to deal with the time and money required to file sales tax reports with the state. Especially given how wages have gone up in recent years, taking the same amount of time will cost more, and I don't see a problem with this level of extra assistance. There is a related increase in admin discounts for businesses that sell cigarettes from 0.8% to 1.25%, which will be another increase in state payments of $3.2 million.

Increase Refundable Portion of the Research Tax Credit. Expand the partially refundable research tax credit (including the engine and energy efficiency credits), as computed under current law, to increase the refundable portion from 15% of the credit amount to 25% of the credit amount for taxable years beginninafter December 31, 2023. Increase estimated expenditures for refundable research credit claims by $3,500,000 GPR in 2024-25, with annual expenditures increasing to $13,800,000 GPR beginning in 2025-26.

This is a version of what Evers wanted in his budget, except that Evers wanted that write-off to be 50% instead of 25%. But it's something and should help some industries in the state. And seems a lot better than that bank bailout provision I mentioned earlier.

One business incentive that wasn't part of Governor Evers' budget or added in by the Legislature were any incentives to have films or TV shows shoot in Wisconsin. This was something that state had in place from 2007-2013, allowing media companies to write off as much as 25% of wages, salaries and production costs. But the amount of the credit was limited as early as 2009 under Governor Jim Doyle and a Dem Legislature, and it was discontinued under Scott Walker and a Wisconsin GOP Legislature in 2013.

Now Wisconsin-raised John Ridley, Oscar-winning writer of "12 Years a Slave" and director of television shows such as American Crime, wants to see that state writeoff for film and TV come back, and says Wisconsin would be a strong place to encourage more of this type of work.

Milwaukee native, screenwriter and director John Ridley is embarking on new project to push for new tax incentives to shoot movies in Wisconsin. He met with Gov. Evers this past week: "This is not a lefty liberal issue, this is not a conservative issue. This is a jobs issue." pic.twitter.com/fbpCJCQNIE

— Matt Smith (@mattsmith_news) June 25, 2023

"It really isn't even about the Legislature," Ridley said. "It's going to come down to that, but it's about going to people who are part of the hotel industry and saying here's how this benefits you. It's about going to farmers, who unfortunately they're struggling right now, to say to them look there's an opportunity. And there really is an opportunity, because as you build these incentives, you can build pluses."

"Let's just say - I'm going to pick a number - let's say it's a five percent tax incentive, maybe up to 15 percent. But you can say "Hey, if you film in Rhinelander, we're going to bump that up to 17 percent." If you film in some of the most distressed parts of Wisconsin, whether it's rural parts, that are distressed and population is leaving, or there are urban parts where you need investment, you can increase that incentive so people are going to want to come and spend money there.

And yes, Ridley mentions Foxconn in the interview, and notes that for a fraction of the infrastructure and tax breaks that paid for that debacle development, Wisconsin could start up a "dream factory" for filmed entertainment and related industries.

I'm not a big fan of tax breaks for business as a principle, but I'd much rather them be broader-based for an industry that can grow over targeting one business with shifting, unknown plans. Seems like a film incentive proposal could be something worth reviving and at least having hearings on over the next year. And it would likely get quite a bit of attention, especially if someone like Ridley or UW-Madison grad Michael Mann (who filmed Public Enemies in Wisconsin under the prior incentives) were to talk to a Legislative committee about how these incentives work in their industry.

There are other things to pick out as the budget gets to the Assembly and Senate floors this week (well, we think it'll be this week). But these are some of the smaller items to farm out that can make for an intriguing side-conversation as part of a bigger document that is sure to end up being hundreds of pages.