Published January 1, 2004 | January 2004 issue
Manufacturers in Wisconsin will receive a sales tax exemption for energy use under a law signed Dec. 8 by Gov. Jim Doyle.
The exemption begins Jan. 1, 2006, and will supplement a current program granting companies income tax credits for energy sales tax costs. The biggest beneficiaries of the new exemption will likely be companies with financial difficulties. Existing tax credits are applied against a company's income taxes, which does nothing to help companies that aren't profitable.
The new program will allow all companies—profitable or not—to lower expenses in the face of inflating energy prices. In particular, papermakers will benefit from the exemption, since they are the state's largest energy users and face increasingly slumping sales.
The law also places a two-year moratorium on usage of stored-energy tax credits, in order to compensate for the estimated $9 million annual revenue loss from the new exemption. After the moratorium, companies will only be eligible to use their stored credits if they maintain employment levels or investment in Wisconsin.