Green Bay Reporter

The new bill authored by State Rep. Sortwell aims to encourage businesses to transition to employee ownership structures through tax incentives and educational outreach, according to the Wisconsin State Assembly.

According to the Wisconsin State Legislature's official website, the bill was described as follows: "creating an employee ownership conversion costs tax credit, a deduction for capital gains from the transfer of a business to employee ownership, and an employee ownership education and outreach program. (FE)".

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill introduces tax incentives for businesses in Wisconsin that transition to employee ownership structures, specifically employee stock ownership plans (ESOPs) or worker-owned cooperatives. Beginning January 1, 2025, businesses can receive a nonrefundable tax credit of up to 70% of conversion costs, capped at $100,000, for establishing worker-owned cooperatives, or 50% for ESOPs. Additionally, businesses transferring ownership to these structures can benefit from a capital gains tax deduction. The Department of Revenue is tasked with establishing an outreach program to educate and assist businesses and employees on the benefits and processes of adopting employee ownership models. The bill also mandates an application for a federal grant to support these initiatives, setting aside up to $5 million annually for tax credits, with any unused funds rolling over to the next year.

The bill was co-authored by Senator Jesse L. James (Republican-23rd District), Representative Clinton M. Anderson (Democrat-45th District), Representative Ryan M. Clancy (Democrat-19th District), Representative Angelina M. Cruz (Democrat-62nd District), Representative Ben DeSmidt (Democrat-65th District). It was co-sponsored by Senator Chris Larson (Democrat-7th District) and Senator Cory Tomczyk (Republican-29th District), along 23 other co-sponsors.

Shae A. Sortwell has co-authored or authored another four bills since the beginning of the 2025 session, with none of them being enacted.

Sortwell graduated from the University of Wisconsin-Green Bay in 2006 with a BA.

Sortwell, a Republican, was elected to the Wisconsin State Assembly in 2019 to represent the state's 2nd Assembly district, replacing previous state representative André Jacque.

In Wisconsin, the legislative process starts when a senator, constituent, group, or agency proposes an idea for a bill. After drafting, the bill is introduced, numbered, and referred to a committee for review and public input. If approved, it moves through three readings and votes in both the Senate and Assembly. Once both chambers pass the same version, the bill goes to the governor, who can sign it, veto it, or let it become law without a signature. Only a small share of bills introduced each session ultimately become law. You can learn more about the Wisconsin legislative process here.

Bill Number	Date Introduced	Short Description
AB17	02/06/2025	Creating an employee ownership conversion costs tax credit, a deduction for capital gains from the transfer of a business to employee ownership, and an employee ownership education and outreach program. (FE)