You may have noticed some more blue on our state QSBS map. As of October 25, 2023, Wisconsin allows for the full QSBS exclusion!
Governor Tony Evers signed Assembly Bill 406 which modified Wisconsin’s conformity to Federal QSBS, retroactive to QSBS gains realized after December 31, 2018. See the Governor’s office press release here.
Prior to Assembly Bill 406, “for stock acquired after December 31, 2013” Wisconsin followed the “Static” conformity – and only conformed to 1202 as of a specific date, December 31, 2013. See Wis. Stat. § 71.98(5). Although the federal treatment of QSBS allows for a progressive 50%, 75%, or 100% exclusion on QSBS capital gains depending on the date of acquisition starting in 1993, the Wisconsin Department of Revenue previously only recognized the exclusion for QSBS acquired after December 31, 2013 and held for at least 5 years (at the 50% exemption level).
Because the 100% Federal QSBS exclusion was not made permanent until the PATH Act during 2015, Wisconsin had never adopted the 75% or 100% exclusion levels until the change with Assembly Bill 406.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.