1. ​​​​​ What is the economic development surcharge?
2. Who is subject to the economic development surcharge?
3. What are the economic development surcharge rates?
   

1. What is the economic development surcharge?
   
   

   The economic development surcharge applies to certain businesses that have $4 million or more of gross receipts. The minimum economic development surcharge is $25 and the maximum is $9,800.

   For more information about the economic development surcharge, see Wisconsin Publication 400.​

2. Who is subject to the economic development surcharge?
   
   

   For taxable years beginning on or after January 1, 2013, the economic development surcharge applies to corporations and insurance companies, exempt organizations, and tax-option (S) corporations that meet the following requirements.

   Corporations and insurance companies that --

   • are required to file a Wisconsin franchise or income tax return, Form 4, or 6,
   • are engaged in business in Wisconsin, and
   • have at least $4 million of gross receipts from all activities.
   • for combined groups, the economic development surcharge is determined for each company individually based on its own gross receipts from all activities and its share of the gross tax computed on the combined return.
     
     

   Exempt organizations that --

   • are required to file a Wisconsin franchise or income tax return, Form 4T,
   • are engaged in unrelated trade or business activities in Wisconsin, and are taxable as corporations and have at least $4 million of gross receipts from all unrelated trade or business activities.
     
     

   Tax-option (S) corporations that --

   • are required to file a Wisconsin franchise or income tax return, Form 5S,
   • are engaged in business in Wisconsin, and
   • have at least $4 million of gross receipts from all activities.
     
     
3. What are the economic development surcharge rates?
   
   

   The rates for the economic development surcharge are as follows

   • Corporations (except tax-option (S) corporations), insurance companies, and exempt organizations taxable as corporations: The greater of $25 or 3% of Wisconsin gross tax liability, but not more than $9,800.
     
     
   • Tax-option (S) corporations: The greater of $25 or 0.2% of Wisconsin net income as allocated or apportioned to Wisconsin, but not more than $9,800.

Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted​ as of October 11, 2024: secs. 77.93, 77.94 and 77.96, Wis. Stats., and sec. Tax 2.32, Wis. Adm. Code.

Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.

The department welcomes your input on our guidance. Submit comments on this guidance document.

Guidance Document Number: 100124

October 11​, 2024​​