The Wisconsin State Assembly passed a bill Thursday allowing taxpayers to receive federal tax credit for making investments in low-income neighborhoods.

The bill states any individual who applies for commerce in any of the locations that are deemed “qualified community development entities,”– essentially low-income neighborhoods — may make a credit claim for the first seven years of business.

The amount of credit a taxpayer can claim is equal to the amount of their investment, multiplied by 5 percent for the first three years and 6 percent for the next four years. The bill stipulates the company must be reassessed on an annual basis.

The person or business applying for the tax credit must make the investment with the primary goal of serving or providing investment capital for low-income communities or low-income persons.

Assembly Speaker Mike Sheridan, D-Janesville, and Rep. Peter Barca, D-Kenosha, the main sponsors of the bill, said they were proud of the bipartisan support that led to the passing of the New Markets Job Credit. The bill passed 93-1.

This bill is a very important jobs and economic development initiative, Barca said at the floor session. He added the bill would allow growing businesses to receive capital for necessary expansions.

Rep. Phil Garthwaite, D-Dickeyville, added urban areas will not be the only to benefit, but rural areas would benefit greatly from the bill as well.

Much of the support for the bill was drummed up from the successful results seen from the federal government New Markets Tax Credit, which was established in 2000, and by the success seen in other states with similar programs, Barca and Sheridan said in a statement.

Before the vote took place, Derrick Martin, President of Lena’s Food Market, who spoke at the session Thursday, said the tax credit helped his business to grow and improve.

“This tax credit gave Lena’s an opportunity to invest in the Milwaukee neighborhoods we serve, growing our grocery business and creating jobs,” Martin said. “Already, we employ 270 people, and with additional support from the state, I could see us hiring more people and opening new locations in the next couple of years.”

Wisconsin is the seventh such state to pass a bill giving tax credits to small and lower-income businesses.

Barca said he believes this program is a must. Without this bill, Wisconsin would presumably drive many businesses away, costing the state thousands of jobs, Barca said.

Sheridan released a statement shortly after the Assembly session and said he was proud of the Assembly’s approval of the bill.

“We’re on the cutting edge with the New Markets Jobs Credit. This innovative program — one of only a few in the nation — will make Wisconsin business more attractive to investors, directing hundreds of millions of dollars in capital to grow small and mid-sized businesses in our communities. Investments equal growth — and greater opportunity for Wisconsin Workers,” Sheridan said in the statement.