Key insights
- Wisconsin’s new sales tax exemption may reduce upfront costs for certain nuclear fusion projects by removing sales and use tax from qualifying property used exclusively and directly in Wisconsin.
- The exemption is broader than traditional power generation, covering areas such as propulsion systems, materials research, medical isotope production, neutron sources, plasma physics research, and other fusion-enabling applications.
- Companies should review qualifying purchases early and coordinate across procurement, tax, accounts payable, and construction teams so documentation and exemption certificates are handled correctly.
- For businesses and investors evaluating site selection or expansion, this exemption may affect project economics, capital planning, supply chain decisions, and Wisconsin’s appeal for fusion-related investment.
Review fusion tax savings before project costs begin.
Wisconsin took a notable step to support advanced energy innovation by enacting one of the first state-level, fusion-specific sales and use tax exemptions in the United States.
The law creates an exemption for the sales price from the sale, storage, use, or other consumption of tangible personal property exclusively and directly used in a qualifying nuclear fusion technology project. The exemption also applies to purchases by construction contractors for real property improvements, provided the property is used solely at the project location in Wisconsin.
As fusion moves from research concept to capital-intensive development, companies acting early may be better positioned to capture available tax savings and factor them into project planning.
What Wisconsin’s sales tax exemption covers
A key feature of Wisconsin Act 165 is its broad definition of a “nuclear fusion technology project.” In addition to traditional power generation, the statute includes:
Effective dates
2025 Wisconsin Act 165, signed in April 2026, becomes effective July 1, 2026, and is scheduled to sunset on December 31, 2076.
- Propulsion systems
- Materials research
- Medical isotope production
- Neutron sources
- Plasma physics research
- Other fusion-enabling applications
This expansive definition significantly increases the range of qualifying activities and investments, extending the benefit beyond utility-scale projects to research, development, and commercialization efforts.
How Wisconsin Act 165 became more flexible
As originally introduced (Assembly Bill 657), the legislation contemplated a more prescriptive framework, including:
- A certification process administered by the Wisconsin Economic Development Corporation (WEDC)
- A more defined list of qualifying property
However, the enacted version is broader and more flexible, eliminating the formal approval requirement. For companies operating in a rapidly evolving sector, this change provides greater latitude to apply the exemption across changing technologies and project needs.
Which nuclear fusion project costs may qualify
While the final statute doesn’t list specific equipment categories, earlier versions of the bill provide insight into legislative intent. Examples included:
- Data acquisition and visualization systems
- Cooling infrastructure and power systems
- Electromagnets and superconductors
- Vacuum and cryogenic systems
- Hydrogen isotope processing equipment
- Motor generators
- Radiation detection and monitoring equipment
Compliance for sales and use tax exemption claims
From a practical perspective, companies should align internal processes early to support exemption claims. Under general Wisconsin Department of Revenue practices, sellers are typically relieved of liability for collecting tax when they receive a fully completed exemption certificate within 90 days of the sale and in good faith.
For businesses making significant capital investments, coordination across procurement, tax, accounts payable, and construction teams is critical for making sure:
- Qualifying purchases are identified upfront
- Documentation is collected timely
- Exemption certificates are properly completed and retained
Why fusion businesses may want to evaluate Wisconsin
For venture capital investors, CFOs, and leadership teams, this exemption represents more than a tax benefit — it’s a policy signal.
Fusion-related businesses are inherently capital-intensive, requiring substantial investment in specialized equipment, infrastructure, and facilities. By removing sales and use tax from these inputs, Wisconsin is:
- Reducing the upfront cost of innovation
- Improving project economics
- Positioning itself as an attractive location for fusion-related investment
This aligns with a broader trend of states using targeted tax policy to compete for advanced manufacturing, clean energy, and emerging technology sectors.
How CLA can help evaluate sales tax exemption opportunities
Wisconsin’s Act 165 is an early and targeted effort to support the commercialization of nuclear fusion technology. The combination of a broad definition, flexible structure, and long-term horizon creates a meaningful opportunity for companies operating in this space.
Organizations evaluating site selection, expansion, or new project development should consider how this exemption may impact capital cost, supply chain decisions, and overall investment strategy.
CLA can help you evaluate eligibility, prepare exemption documentation, and coordinate sales and use tax planning with your broader site selection and capital investment decisions.
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