Two major Milwaukee-area employers, WEC Energy Group, the parent of We Energies, and department-store chain Kohl’s, reported paying zero dollars in federal corporate income tax for 2025 even while turning a profit. WEC disclosed roughly $1.67 billion in U.S. pretax income and Kohl’s reported about $294 million. Those local numbers fit into a broader national pattern in which profitable firms used newly expanded tax breaks to drive their federal tax bills to zero for the year.
A new analysis from the Institute on Taxation and Economic Policy, published April 14, 2026, found that at least 88 large U.S. corporations collectively reported more than $105 billion in U.S. pretax income in 2025 and still paid $0 in federal income taxes. At the statutory 21 percent corporate rate, those firms would have owed about $22.1 billion, yet they instead received roughly $4.7 billion in rebates, for an effective tax rate of just 1.4 percent across the group. According to the Institute on Taxation and Economic Policy, accelerated expensing and other provisions were the main drivers of those results.
Local coverage was quick to zero in on the Wisconsin angle. As reported by Urban Milwaukee, ITEP’s appendix lists six Wisconsin-headquartered firms on the zero-tax roster and calls out WEC and Kohl’s among the more prominent players in the state’s economy.
How They Erased Their Tax Bills
ITEP’s analysis points to a small toolkit of powerful provisions that helped drive tax expense to zero. The list includes accelerated depreciation or immediate expensing of capital investments, expanded research-expensing and R&D credits, a foreign-derived deduction for certain export income, and stock-option related deductions. Several of the most consequential provisions were made more generous or retroactive by last year’s federal legislation, which allowed companies to offset current profits with large one-year deductions and credits. The report states that depreciation and research-expensing alone reduced tax bills by billions for the companies in the study.
What It Means For Wisconsin Budgets
Because many states use federal taxable income as the starting point for their own corporate tax calculations, federal deductions and rebates can shrink state corporate tax collections at the same time. Policy analysts at the Center on Budget and Policy Priorities note that states that “conform” to federal changes can see those federal tax breaks flow through and reduce state revenue, while other states choose to decouple or adopt different rules. See the Center on Budget and Policy Priorities for options states have to blunt those losses.
Where The Debate Goes From Here
Critics argue that the pattern shows corporate tax cuts tend to benefit owners and top executives rather than broadly boosting wages or local investment, a point summarized by research collected by the Washington Center for Equitable Growth. At the same time, states are wrestling with whether and how to conform to last year’s federal changes, which has produced a patchwork of responses that could either blunt or deepen local fiscal impacts. For further reading on distributional and state-conformity issues, see Equitable Growth and recent analysis from Crowe.
For Milwaukee residents and state policymakers, the ITEP findings renew questions about whether large local employers are contributing proportionately to the public services that support the regional economy. Local reporters and state budget analysts are watching to see whether lawmakers choose to decouple from specific federal provisions or pursue other reforms that could change how corporate tax breaks flow through to Wisconsin’s coffers.
