Republican lawmakers recently circulated legislation that would create a tax credit aimed at attracting video game companies to Wisconsin.
Rep. Clint Moses, R-Menomonie, and Sen. Patrick Testin, R-Stevens Point, sent a co-sponsorship memo to other lawmakers promoting the bill. In it, they note the video game industry dwarfs both movies and television, and is expected to grow 8.7% per year between 2024 and 2027.
“Many employers in the video game industry have expressed an interest in leaving California, the current hub of the industry,” the lawmakers wrote. “These companies wish to expand their base and bring in additional studios. This is quite the opportunity for Wisconsin.”
Vancouver, Quebec and Austin, Tex. are considered “primary growth regions” for video game development due to their tax incentive programs, according to the memo. The bill authors say the proposed bill would create a similar tax incentive for video game companies.
Under the legislation, an owner of a copyright in “digital interactive media or entertainment” — such as a video game development studio — could get a refundable income tax credit equal to 30% of the qualifying salary or wages and 30% of other related spending in Wisconsin. That could include purchases of software and equipment as well as leasing facilities.
“The video game industry provides high paying jobs in Wisconsin,” the lawmakers wrote. “There are multiple computer related jobs including programmers, as well as graphic designers, musicians, actors, stunt personnel, and project managers.”
Applications for the credit would go through the state Department of Revenue, which would have to determine if the applicant had at least $25,000 in eligible expenditures for the given tax year, according to analysis by the Legislative Reference Bureau. The agency or a certified auditor would also audit the applicants, who would be required to reimburse DOR for related costs.
And DOR would be required to report to the governor and taxation-related legislative committees every two years on the tax credit program, including economic impacts and other details.
The bill has the support of the Wisconsin Technology Council, which advocates for tech-driven industries in the state. Tech Council President Tom Still notes the legislation was “reviewed extensively” by DOR before it was put forward, giving backers more confidence. And he said it takes privacy concerns into consideration, so people can’t get tax credits for putting “spyware” into games.
“Video gaming is going through a transition that should make it easier to attract talent to existing companies in Wisconsin,” he told WisBusiness.com “There have been some layoffs in larger companies (Activision Blizzard, Riot) that will release talent. Some may choose to come here and perhaps even start their own gigs.”
The memo also highlights video game education programs in the state, noting the UW-Stout School of Art and Design is “recognized as one of the best in the Midwest” and has a motion-capture studio like those used by video game developers.
Existing video game companies in the state include PUBG, Raven/Activision/Microsoft, Lost Boys, Roundhouse, Filament and Midwest Games, which last year landed $3 million in a financing round led by TitletownTech in Green Bay.
Midwest Games founder and CEO Ben Kvalo says he supports the bill because it would “greatly help” video game developers and professionals in the state.
“This goes a long way in our ability to attract, retain, and bring back talent that we’ve lost over the last few decades,” he said in an email. “I hope this is the first of many steps in our fight against brain drain… This kind of bill is the difference between billions of dollars coming into or leaving our state.”
See the bill text.
–By Alex Moe
