OVERVIEW – Agricultural Development Zone
The Wisconsin Department of Commerce designated the Northcentral Wisconsin Region consisting of Barron,
The Agricultural Development Zone is designated for 10 years
commencing
According to state statute, a certified business means a “Person” that conducts an agricultural business-related economic activity in an agricultural development zone and has been certified as eligible for tax benefits by the Commerce. A Person means a natural person, estate, trust, partnership, corporation, tax-option corporation, LLC, insurance company, or trade and business entity of American Indian tribe. Cooperatives are not eligible for the tax credits. For our purposes, a person will be called a business.
Interested businesses located in or planning to locate within the Zone shall submit a Commerce Prospect Data Sheet to the Clark County Economic Development Corporation (CCEDC) for determination of eligibility of the tax credits. The application will consist of but not limited to:
-Description of the business.
-Estimated total investment by the business within the Zone.
-Estimated # of full-time jobs to be created, retained or significantly upgraded.
-Starting wages and benefits of persons to be hired.
-Historical and projected financial information
Once the business is determined to be eligible for tax
credits, the CCEDC will take the anonymous application to the
6
Commerce eligibility criteria to establish tax benefits include:
a. Prospects to attract related businesses to the area.
b. Amount of private investment likely to occur.
c. Number and quality of jobs to be created, retained, or upgraded.
d. Competitive effect on other agricultural businesses in the area.
e. Whether the business will continue after the tax credits have been exhausted.
Commerce staff will review the application and notify the business of its certification and make a final determination of the amount of credits it can receive. The business and Commerce will enter into an agreement based on that amount of tax credits. Commerce will correspond with the Wisconsin Department of Revenue regarding the Person’s certification. A certified business may file for tax benefits using the forms acceptable to the department of revenue. However, no business may file for tax benefits without the written approval of Commerce.
The Wisconsin Department of Commerce will certify all
businesses for tax credits, determine the amount of
tax credits, monitor the businesses to ensure compliance with certifying
criteria, communicate with the department of revenue, and be responsible for
any types of revocation of tax credit eligibility.
Application and Review Process for ADZ
Tax Credits
Responsibilities:
1. Market the ADZ program and provide technical assistance.
2. Assist applicants with completion of Prospect Data Sheet.
3. Make initial determination of tax credit eligibility from information provided in the application.
4.
Prepare a summary of the application to be reviewed by the 6
5. Prepare a recommendation form for Commerce staff calculating what the Regional Review Committee recommends for tax credits. That form along with the complete application will be sent to the Commerce for final determination of tax credits.
Wisconsin Department of Commerce:
1. Establish application and eligibility criteria.
2. Provide technical assistance to local zone administrators.
3. Review each project submitted for tax credit eligibility and amount of credits.
4. Certify applicants as a designated ADZ business.
5. Communicate with the Wisconsin Department of Revenue regarding certified businesses and the amount of credits each has been awarded.
6. Verify each business’ tax credits annually.
How does a business receive ADZ tax credits?
1. The first step is for the business to contact the Clark County Economic Development Corporation. CCEDC staff will explain the basic operation of the program, answer questions, and determine if the business meets the basic criteria for ADZ tax credits.
2. If the CCEDC staff feel the project is appropriate for the ADZ program, the business will complete a Prospect Data Sheet with assistance from CCEDC staff.
3.
The completed Prospect Data Sheet will be summarized
and sent to the 6
4. The Regional Review Committee will recommend a total tax credit allocation to Commerce. This allocation can include jobs, capital investment, and environmental remediation credits up to $250,000 per business.
5. The Regional Review Committee’s recommendation will be forwarded to Commerce staff who will review the application materials before making final determination of tax credits.
6. If the application is approved by Commerce, the business will be notified in writing of its designation as an ADZ business.
7. Commerce staff along with CCEDC staff will meet with the business to review the ADZ program guidelines.
8.
The business can claim the tax credits it earns by
submitting annual reports to Commerce.
Commerce staff will review and issue tax credit verification forms to
the business, which will attach these forms to its
ADZ Job Credit:
Businesses can receive a tax credit based on a calculation of the number of jobs retained and/or created; the combined hourly wage and benefit amount of those jobs; and 25% of the new hires will be target group members. Credits can range from $3,000 to $6,500 per job.
Examples of targeted groups are dislocated worker, economically disadvantaged ex-convicts, economically disadvantaged veterans, General Assistance recipients, W2 participants, vocational rehabilitation referrals, economically disadvantaged youths, and Supplemental Security Income (SSI) recipients.
Commerce generally apportions job credits over a three year period of time at 25%-25%-50%.
ADZ Environmental Remediation Credit:
A business may be eligible for a tax credit of 50% of eligible environmental remediation expenses incurred by the business.
“Environmental Remediation” means:
· removal or containment of environmental pollution;
· restoration of soil or groundwater that is affected by environmental pollution in a brownfield; and
· investigation, unless the investigation determines that remediation is required and that remediation is not undertaken.
A business may claim environmental credits in the fiscal year the eligible remediation expenses were incurred. The business must begin the removal, containment or restoration after the business is certified in the ADZ program.
However, planning and investigating may be done before the business is certified, and
credits for those expenses may be claimed after certification, regardless of whether or not they occurred in that fiscal year. Note: The business must have a tax liability.
ADZ Capital Investment Credit:
A business may be allocated income tax credits of 3% of its capital investment in a project within the ADZ. Eligible investment expenses include:
1. The purchase price of depreciable, tangible personal property; and
2. The amount expended to acquire, construct, rehabilitate, remodel, or repair real property.
· The expenses MUST be incurred by the business itself and paid by the business directly.
· The business may claim credits in the year the expenses are incurred for the purchase of equipment and acquisition of a new building that is new to them.
· The business may claim credits for expenses incurred for construction and rehabilitation in the year the building or area is placed into service.
· When a business is certified, the certification goes back to the beginning of the year. These credits are awarded based on the investment of that year.
Prospect Date Sheet (Application for Tax Credits) Contents:
Local Contact:
Sheila Nyberg, Executive Director
212 S. Main Street
Phone: 1-888-252-7594 or 715-267-3205
Fax: 715-267-5320
Email: clarkwi@tds.net
Updated 3/21/2006