by Jeff Storch, with assistance from law clerk Woo Min Kang

Governor Walker signed the new State of Wisconsin budget bill on June 26, 2011. It includes provisions that affect the Dairy Manufacturing Facility Investment Credit, which provides refundable credits for businesses that have invested to modernize or expand dairy manufacturing facilities in Wisconsin.

The Credit permits eligible businesses to apply for tax credits for certain expenses, including those for:

• Building construction and additions
• Upgrades to utilities
• Milk intake and storage equipment
• Processing and manufacturing equipment, including pipes, motors, pumps, valves, pasteurizers, homogenizers, vats, evaporators, dryers, concentrators and churns
• Packaging and handling equipment
• Warehouse equipment
• Waste treatment and waste management equipment, including tanks, blowers, separators, dryers, digesters and equipment that uses waste to produce energy, fuel or industrial products
• Computer software and hardware used for managing the dairy manufacturing operation

Businesses can claim up to 10% of the eligible amount spent in a taxable year.

The maximum amount a business can receive is still $200,000; however, the new budget adds that a business with multiple dairy manufacturing facilities can receive a maximum of $200,000 for each facility. If 2 or more persons own and operate a dairy manufacturing facility, each person may claim a credit in proportion to his or her ownership interest, but the sum of the credits claimed by all persons who own and operate a single facility may not exceed $200,000. The maximum amount of credit available statewide each year is capped, with different amounts set aside for dairy cooperative members and for non-dairy cooperative members. The current cap is generally $700,000 for each group.

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