Business and construction interests are backing a GOP plan that would expand a sales tax exemption on materials used in construction projects. WMC, Construction Interests Back Expanded Tax Break

May 31, 2017

There already is an exemption for materials in a so-called lump sum contract, which is normally used in the construction industry to reduce design and contract administration costs. It is called a lump sum because the contractor is required to submit a global price instead of bidding on individual items.

This tax break, created in 2013, applies if the total sales price of the taxable products is less than 10 percent of the total contract price.

Senator Roger Roth
Senator Roger Roth

Under Senate Bill 273 and Assembly Bill 340, the exemption would be expanded to apply to all construction contracts if the total sales price of the taxable products is less than 10 percent of the total contract price. The bill also provides that, if a contract qualifies for the exemption, the exemption applies to all subcontracts.

The price tag for a similar proposal in Republican Gov. Scott Walker’s proposed 2017-19 budget, which the GOP-controlled legislature is now reviewing, is $2.75 million over two years.

The measure was authored by GOP Sen. Roger Roth, of Appleton, whose family owns a construction business, and Rep. Rob Stafsholt, of New Richmond. Stafsholt is a farmer and owns a residential rental business and a salad and food dressing company.

The proposal is backed by business and construction interests led by Wisconsin Manufacturers & Commerce (WMC), the state’s largest business organization and a major lobbying and electioneering force. Overall, WMC has spent an estimated $18.6 million since 2010 on undisclosed, outside electioneering activities to support Republican and conservative legislative and statewide candidates.

In addition to secret, outside spending on elections, WMC also represents more than a dozen special interests, including business, real estate, manufacturing, and construction, contributed $16.7 million between January 2011 and December 2016 to Republican legislators.

Representative Rob Stafsholt
Rep. Rob Stafsholt

Stafsholt, who was first elected in 2016, accepted about $50,100, or 43 percent, of his large individual and political action committee (PAC) contributions in 2015 and 2016 from employees of WMC-represented interests. His top contributors during those two years were retirees Grant and Carol Nelson, of Prescott, and Scott Teigen, of Glenwood City, vice president of real estate for Kwik Trip, and his wife, Carol. Each couple contributed $2,000 to Stafsholt’s campaign.

Roth, who was elected to the Senate in 2014, accepted about $274,600, or 66 percent, of his large individual and PAC contributions from January 2013 through December 2016 from employees of WMC-represented interests. Among Roth’s top contributors were individuals and couples who gave him $2,000 each during that time, including:

Thomas Radtke, of Winneconne, president of Bob Radtke Inc.;

Albert Hentzen, of Milwaukee, chief executive officer of Hentzen Coatings, and his wife, Kathryn;

Daniel and Linnette Wolfberg, of Winnetka, Ill., co-owners of the Payday Loan Store;

Robert and Lynne Wolfberg, of Glencoe, Ill., co-owners of the Payday Loan Store;

Ted Kellner, of Mequon, chief executive officer of Fiduciary Management, and his wife, Mary;

Terry and Mary Kohler, of Sheboygan, owners of Windway Capital.