Obtain Your Manufacturing Classification to Save Significant Taxes

March 30, 2015

“Wisconsin is open for business!” Governor Walker has made this statement on numerous occasions in recent years. There has not been a better time in recent history to be a manufacturer in Wisconsin. As a manufacturer, your company is eligible for the Manufacturing and Agriculture Credit, Property Tax Exemptions, Sales/Use Tax Exemptions, and Research & Development Credit.

How do companies obtain these tax savings? The process is straightforward. The State of Wisconsin requires a two page application, Form PA-780, Questionnaire for Potential Manufacturers. The form is due no later than March 1 of each calendar year; once the classification is granted, there is no additional annual filing requirement. The good news is that the form may be submitted to the Department of Revenue at any time during the year.

The state assessor will review the application and any supporting information provided by the applicant. In some cases, the assessor may call with additional questions, or may want to tour the facility to aid in their determination. A couple of important points: if you are a manufacturer for sales/use tax, you are not automatically a manufacturer for property tax purposes (property tax has a different statutory definition).

Once you submit the questionnaire and are classified as a manufacturer, your company maintains the classification as long as the manufacturing activity continues on the property. If you have multiple facilities, you will need to prepare and submit a questionnaire for each individual location. In accordance with state statutes, you will be field audited every five years. Lastly, if your entire property is not dedicated to manufacturing, partial classifications are available.

If you think your facility qualifies for this tax saving classification, or have any additional questions, call Schenck's State and Local Tax Team to discuss the details and your specific facts.