UW System Position on Bills Introduced in the Legislature During the 2005-2006 Session
Tuition Tax Credit for Businesses
(Jensen) This bill creates a non-refundable income tax and franchise tax credit for businesses that pay tuition for an individual to attend a university, college, or technical college. The credit is an amount equal to: 1) 50% of the tuition paid by a business for an individual in a taxable year, if the individual is enrolled in a degree–granting program; and 2) 75% percent of the tuition paid by a business for an individual if the individual’s taxable income is 185% of the federal poverty line or less.
UW System Position
Support: The legislation will create new educational opportunities for Wisconsin students and will contribute to Wisconsin’s ability to retain students. This legislation is an important component of a ‘brain gain’ strategy.
Employers and students both gain when an employer is willing to pay for the cost of higher education. Taxpayers gain because this approach leverages private dollars as financial aid for students.
This bill represents an effort to make higher education available to as many students as possible and will help meet the demand for continuing education.
The Department of Revenue estimates that this bill would decrease revenue by $18 million, but tax payments from individuals with higher incomes would offset this in the long run. The difference between a high school degree and a Bachelor’s degree can add $1 million in lifetime earnings resulting in increased income taxes paid.