Senate Bill 21 (PDF), a bipartisan bill introduced in both the Wisconsin Senate and Assembly, would create a tax credit of up to 70% of the costs of converting to a worker cooperative and 50% of the cost of adopting an ESOP, with a credit cap of $100,000. Up to a total of $5 million in credits could be allocated each year, and any unused allocation could be carried forward.
The bill would also eliminate the capital gains tax due by selling owners on the sale to a worker cooperative or ESOP if the worker cooperative or ESOP ends up with over 50% of the ownership of the firm. Capital gains in Wisconsin can be taxed at up to 7.5%.
Finally, the bill would direct the Department of Revenue to create an outreach program to provide training and education around employee ownership. It directs the Department to apply for funding under the Work Act of 2022 for funding for the program. it should be noted that although that act authorized finds for grants to state programs like these, no appropriations have yet been made for the program (scheduled to start this year), and prospects are at best uncertain.