Exempting persons engaged in certain contract research services from the sales and use tax, the official text

2025 - 2026 LEGISLATURE
LRB-4571/1
KP:skw

2025 ASSEMBLY BILL 670
November 19, 2025 - Introduced by Representatives Armstrong, Dittrich and Steffen, cosponsored by Senator Marklein. Referred to Committee on Ways and Means.

An Act to renumber and amend 77.54 (57d) (a) 4.; to create 77.54 (57d) (a) 2m., 77.54 (57d) (a) 4. b. and 77.54 (57d) (b) 4. of the statutes; relating to: exempting persons engaged in certain contract research services from the sales and use tax.

Analysis by the Legislative Reference Bureau
This bill exempts persons engaged in contract research services from the sales and use tax for the purchase of machinery and equipment that is consumed or destroyed in use exclusively for qualified research. Under the bill, “contract research services” is research conducted by a person for a customer that, if conducted by employees of the customer, would constitute qualified research. Current law provides a sales and use tax exemption for the purchase of machinery and equipment that is consumed or destroyed in use exclusively for qualified research by persons engaged in manufacturing on manufacturing property and by persons engaged primarily in biotechnology.
Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill.
For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

Section 1. 77.54 (57d) (a) 2m. of the statutes is created to read:
77.54 (57d) (a) 2m. “Contract research services” means research conducted by a person on behalf of a customer that, if conducted by employees of the customer, would constitute qualified research.
Section 2. 77.54 (57d) (a) 4. of the statutes is renumbered 77.54 (57d) (a) 4. (intro.) and amended to read:
77.54 (57d) (a) 4. (intro.) “Qualified research” means qualified research as defined under section 41 (d) (1) of the Internal Revenue Code, except that it includes qualified all of the following:
a. Qualified research that is funded by a member of a combined group for another member of a combined group.
Section 3. 77.54 (57d) (a) 4. b. of the statutes is created to read:
77.54 (57d) (a) 4. b. Qualified research that is funded by contract research expenses as defined under section 41 (b) (3) of the Internal Revenue Code.
Section 4. 77.54 (57d) (b) 4. of the statutes is created to read:
77.54 (57d) (b) 4. A person engaged in contract research services in this state.
Section 5. Effective date.
(1) This act takes effect on the first day of the 3rd month beginning after publication.
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