SB204: Bill Text

2025 - 2026 LEGISLATURE

LRB-2552/1

KP:cdc

2025 SENATE BILL 204

April 16, 2025 - Introduced by Senators Testin and Feyen, cosponsored by Representatives Moses, Zimmerman, Behnke, Callahan, Goodwin, Gundrum and Swearingen. Referred to Committee on Agriculture and Revenue.

SB204,1,5 An Act to amend 71.05 (6) (a) 15., 71.10 (4) (i), 71.21 (4) (a), 71.21 (6) (d) 3., 71.26 (2) (a) 4., 71.30 (3) (f), 71.34 (1k) (g), 71.365 (4m) (d) 2., 71.45 (2) (a) 10. and 71.49 (1) (f); to create 20.835 (2) (de), 71.07 (12), 71.28 (12), 71.47 (12) and 73.03 (78) of the statutes; relating to: creating a video game production tax credit and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill creates a refundable video game production income and franchise tax credit. The credit is equal to the sum of the following: 1) 30 percent of the eligible wages paid by the claimant directly relating to developing, producing, or creating a video game product; and 2) 30 percent of the claimant’s eligible expenditures directly relating to developing, producing, or creating a video game product. Under the bill, “video game product” means, subject to certain exceptions, an electronic game developed for commercial distribution and entertainment that involves interaction with a used interface to generate visual feedback on a video device. “Video game product” does not include social media, gambling products, or products with obscene content. The bill also defines “eligible expenditures” as expenditures directly relating to developing, producing, or creating a video game product but excludes various specified expenditures, such as payments for royalties, capital expenditures, management and administrative expenses, marketing expenses, and interest. To claim the credit for a tax year, a person must file an application with the Department of Revenue and receive a certificate of eligibility for the credit. To receive a certificate, an applicant must submit an audit of its eligible expenditures to DOR. The credit under the bill is refundable, which means that if the credit exceeds the claimant’s tax liability, the claimant will receive the difference as a refund check.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB204,1 Section 1. 20.835 (2) (de) of the statutes is created to read:

SB204,2,3 20.835 (2) (de) Video game production credit. A sum sufficient to make the payments under ss. 71.07 (12), 71.28 (12), and 71.47 (12).

SB204,2 Section 2. 71.05 (6) (a) 15. of the statutes is amended to read:

SB204,2,10 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5i), (5j), (5k), (5r), (5rm), (6n), and (10), and (12) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership’s, company’s, or tax-option corporation’s income under s. 71.21 (4) or 71.34 (1k) (g).

SB204,3 Section 3. 71.07 (12) of the statutes is created to read:

SB204,2,13 71.07 (12) Video game production credit. (a) Definitions. In this subsection:

SB204,2,14 1. “Claimant” means a person certified under s. 73.03 (78).

SB204,2,16 2. “Eligible expenditures” means amounts paid by the claimant directly relating to qualifying activities in this state, excluding any of the following:

SB204,2,17 a. Wages.

SB204,3,1 b. Expenditures used to claim another credit under this chapter.

SB204,3,3 c. Amounts paid to a person certified to receive a credit under this subsection or s. 71.28 (12) or 71.47 (12).

SB204,3,6 d. Amounts paid to persons as a result of their participation in profits from video game production, such as commissions, royalties, or profit-sharing agreements.

SB204,3,7 e. Amounts paid for capital expenditures, such as buildings and equipment.

SB204,3,8 f. Amounts paid to purchase a copyright, trademark, or tradename.

SB204,3,9 g. Amounts paid for management or other administrative activities.

SB204,3,10 h. Amounts paid for marketing, promotion, or distribution.

SB204,3,11 i. Amounts paid for food or entertainment.

SB204,3,12 j. Interest paid on loans or other credit arrangements.

SB204,3,14 3. “Eligible wages” means wages paid by the claimant directly relating to qualifying activities in this state.

SB204,3,16 4. “Qualifying activities” means developing, producing, or creating a video game product or platform.

SB204,3,20 5. “Video game product or platform” means an electronic game developed for commercial distribution and entertainment that involves interaction with a user interface to generate visual feedback on a video device. “Video game product or platform” does not include any of the following:

SB204,3,21 a. A product or platform that contains content in violation of s. 944.21.

SB204,3,23 b. A product or platform designed for political, religious, or educational purposes.

SB204,4,1 c. A product or platform regulated under chs. 562 to 569.

SB204,4,4 d. A product or platform designed to provide information about one or more individuals or businesses, such as marketing and promotional websites or microsites.

SB204,4,8 e. A product or platform designed for social media or interpersonal communications, such as podcasting, interactive advertising, journalism, video conferencing, wireless telecommunications, text-based channels, chat rooms, or broadcast or streamed viewing enhancements.

SB204,4,10 f. A product or platform designed to stream linear media such as audio, video, or pictures.

SB204,4,11 g. Small-scale electronic games embedded and used exclusively in advertising.

SB204,4,14 6. “Wages” means wages, as defined in s. 71.63 (6), that are subject to withholding under subch. X and for which a statement under s. 71.65 (1) is furnished.

SB204,4,17 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2024, a claimant may claim as a credit against the tax imposed under s. 71.02 any of the following amounts:

SB204,4,19 1. An amount equal to 30 percent of the eligible wages paid by the person in the taxable year.

SB204,4,21 2. An amount equal to 30 percent of the eligible expenditures incurred by the claimant in the taxable year.

SB204,5,3 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant files an application with the department, at the time and in the manner prescribed by the department, and the department approves the application. The claimant shall submit a copy of the approved application with the claimant’s return.

SB204,5,14 2. No credit may be allowed under this subsection unless the claimant retains at the claimant’s sole expense a certified public accountant licensed under ch. 442 to review and certify to the department the total eligible expenditures incurred and total eligible wages paid in the taxable and to conduct the audit required under s. 73.03 (78) (c). No audit of a claimant required under s. 73.03 (78) (c) may be performed by a certified public accountant that is part of an accounting entity that is not determined by the department to be independent of the claimant, consistent with s. 442.10 and as provided in the code of professional conduct of the American Institute of Certified Public Accountants, or its successor organization, or as otherwise determined by the department. The certified public accountant shall do all of the following:

SB204,5,16 a. Conduct the audit required under s. 73.03 (78) (c) according to any rules promulgated by the department.

SB204,5,18 b. Verify each reported expenditure that is included in the audit and identify and exclude each expenditure that does not satisfy this subsection.

SB204,6,2 3. Eligible expenditures incurred and eligible wages paid by a tax-option corporation, partnership, or limited liability company that is treated as a partnership may be claimed as a credit under this subsection by that corporation’s shareholders, that partnership’s partners, or that limited liability company’s members who are residents of this state and who otherwise qualify under this subsection, unless the tax-option corporation, partnership, or limited liability company has made an election under s. 71.21 (6) (a) or 71.365 (4m) (a).

SB204,6,6 4. If a tax-option corporation, partnership, or limited liability company makes an election under s. 71.21 (6) (a) or 71.365 (4m) (a), that tax-option corporation, partnership, or limited liability company may claim the credit under this subsection.

SB204,6,8 (d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the credits under this subsection.

SB204,6,15 2. If the allowable amount of the claim under par. (b) exceeds the tax otherwise due under this chapter or no tax is due under this chapter, the amount of the claim not used to offset the tax due shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (de). Notwithstanding s. 71.82 (1) (b), no interest shall be added to amounts certified under this subdivision.

SB204,4 Section 4. 71.10 (4) (i) of the statutes is amended to read:

SB204,7,2 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and beyond under s. 71.613, homestead credit under subch. VIII, jobs tax credit under s. 71.07 (3q), business development credit under s. 71.07 (3y), research credit under s. 71.07 (4k) (e) 2. a., veterans and surviving spouses property tax credit under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), electronics and information technology manufacturing zone credit under s. 71.07 (3wm), earned income tax credit under s. 71.07 (9e), video game production credit under s. 71.07 (12), estimated tax payments under s. 71.09, and taxes withheld under subch. X.

SB204,5 Section 5. 71.21 (4) (a) of the statutes is amended to read:

SB204,7,7 71.21 (4) (a) The amount of the credits computed by a partnership under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10), and (12) and passed through to partners shall be added to the partnership’s income.

SB204,6 Section 6. 71.21 (6) (d) 3. of the statutes is amended to read: