Date of enactment: April 10, 1996
1995 Assembly Bill 1033 Date of publication*: April 24, 1996
* Section 991.11, Wisconsin Statutes 1993-94: Effective date of acts. "Every act and every portion of an act enacted by the legislature over the governor's partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication as designated" by the secretary of state [the date of publication may not be more than 10 working days after the date of enactment].
1995 WISCONSIN ACT 209
(Vetoed in Part)
An Act to repeal 71.07 (2dj) (d), 71.07 (2ds) (c), 71.28 (1dj) (d), 71.28 (1ds) (c), 71.47 (1dj) (d), 71.47 (1ds) (c), 560.71 (1) (cm), 560.72 (4), 560.723, 560.725 (1) (a) to (h), 560.73 (1) (c) 6., 560.735 (3), 560.75 (3), 560.763 (1) (a), 560.763 (2), 560.763 (3) and 560.79; to renumber and amend 560.725 (1) (intro.); to amend 20.835 (2) (cm), 20.835 (2) (cn), 71.05 (6) (a) 15., 71.07 (2dd) (a) 1., 71.07 (2dd) (a) 2., 71.07 (2dj) (am) 1., 71.07 (2dj) (am) 3., 71.07 (2dj) (am) 8m., 71.07 (2dj) (h), 71.07 (2dL) (ar), 71.07 (2ds) (h), 71.08 (1) (intro.), 71.10 (4) (gd), 71.10 (4) (ge), 71.10 (4) (i), 71.28 (1dd) (a) 1., 71.28 (1dd) (a) 2., 71.28 (1dj) (am) 1., 71.28 (1dj) (am) 3., 71.28 (1dj) (am) 8m., 71.28 (1dj) (h), 71.28 (1dL) (ar), 71.28 (1ds) (h), 71.30 (3) (eb), 71.30 (3) (ec), 71.30 (3) (f), 71.47 (1dd) (a) 1., 71.47 (1dd) (a) 2., 71.47 (1dj) (am) 1., 71.47 (1dj) (am) 3., 71.47 (1dj) (am) 8m., 71.47 (1dj) (h), 71.47 (1dL) (ar), 71.47 (1ds) (h), 71.49 (1) (eb), 71.49 (1) (ec), 71.49 (1) (f), 73.03 (35), 77.92 (4), 560.70 (4), 560.70 (6), 560.70 (7), 560.71 (3) (a), 560.72 (2) (c), 560.72 (3), 560.725 (2), 560.725 (3), 560.73 (1) (f), 560.73 (1) (g), 560.73 (3), 560.735 (1) (a), 560.735 (1) (b), 560.735 (1) (c), 560.735 (6) (a) (intro.), 560.735 (6) (a) 2., 560.735 (6) (a) 3., 560.735 (6) (b), 560.74 (2), 560.745 (2) (a), 560.763 (title) and 560.797 (1) (c); to repeal and recreate 560.71 (1) (e); and to create 71.07 (2dj) (am) 4h., 71.07 (2dj) (am) 4i., 71.07 (2dr), 71.10 (4) (gm), 71.28 (1dj) (am) 4h., 71.28 (1dj) (am) 4i., 71.47 (1dj) (am) 4h., 71.47 (1dj) (am) 4i., 560.71 (1m), 560.71 (3) (c) 3., 560.735 (6) (c), 560.735 (6m) and 560.745 (2) (am) of the statutes; relating to: the development zone program, development zones tax credits and making an appropriation.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
209,1 Section 1. 20.835 (2) (cm) of the statutes is amended to read:
20.835 (2) (cm) Development zones jobs credit. A sum sufficient to make the payments under ss. 71.07 (2dj) (d) (h), 71.28 (1dj) (d) (h) and 71.47 (1dj) (d) (h).
209,2 Section 2. 20.835 (2) (cn) of the statutes is amended to read:
20.835 (2) (cn) Development zones sales tax credit. A sum sufficient to make the payments under ss. 71.07 (2ds) (c) (h), 71.28 (1ds) (c) (h) and 71.47 (1ds) (c) (h).
209,3 Section 3. 71.05 (6) (a) 15. of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:
71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dr) and (2ds) and not passed through by a partnership, limited liability company or tax-option corporation that has added that amount to the partnership's, company's or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).
209,4 Section 4. 71.07 (2dd) (a) 1. of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.07 (2dd) (a) 1. "Day care center benefits" means benefits provided at a day care facility that is licensed under s. 48.65 or 48.69 and that for compensation provides care for at least 6 children or benefits provided at a facility for persons who are physically or mentally incapable of caring for themselves.
209,5 Section 5. 71.07 (2dd) (a) 2. of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.07 (2dd) (a) 2. "Employment-related day care expenses" means amounts paid or incurred by a claimant, during the 2-year period beginning with the day that the member of the targeted group begins work for the claimant, for providing or making day care center benefits available to a qualifying individual in order to enable a member of a targeted group to be employed by the claimant.
209,6 Section 6. 71.07 (2dj) (am) 1. of the statutes is amended to read:
71.07 (2dj) (am) 1. Modify "member of a targeted group", as defined in section 51 (d) of the internal revenue code as amended to December 31, 1995, to include persons unemployed as a result of a business action subject to s. 109.07 (1m) and persons specified under 29 USC 1651 (a) and to require a member of a targeted group to be a resident of this state.
209,7 Section 7. 71.07 (2dj) (am) 3. of the statutes is amended to read:
71.07 (2dj) (am) 3. Modify the rule for certification under section 51 (d) (16) (A) of the internal revenue code to allow certification within the 30-day 90-day period beginning with the first day of employment of the employe by the claimant.
209,8 Section 8. 71.07 (2dj) (am) 4h. of the statutes is created to read:
71.07 (2dj) (am) 4h. Modify section 51 (a) of the internal revenue code so that the amount of the credit is 25% of the qualified first-year wages if the wages are paid to an applicant for a Wisconsin works employment position for service either in an unsubsidized position or in a trial job under s. 49.147 (3) and so that the amount of the credit is 20% of the qualified first-year wages if the wages are not paid to such an applicant.
209,9 Section 9. 71.07 (2dj) (am) 4i. of the statutes is created to read:
71.07 (2dj) (am) 4i. Modify section 51 (b) (3) of the internal revenue code so that the amount of the qualified first-year wages that may be taken into account is $13,000.
209,10 Section 10. 71.07 (2dj) (am) 8m. of the statutes is amended to read:
71.07 (2dj) (am) 8m. For each person, whether or not he or she is a member of a targeted group, who is determined by the department of development to be a resident of the development zone in which he or she is employed, calculate a credit equal to 10% of the wages earned by such person during the first year 1st and 2nd years of the person's employment in the development zone, up to a maximum credit of $600 per year.
209,11 Section 11. 71.07 (2dj) (d) of the statutes, as affected by 1995 Wisconsin Act 27, is repealed.
209,12 Section 12. 71.07 (2dj) (h) of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.07 (2dj) (h) For claims based on activity in a zone under s. 560.797, the The rules under sub. (2di) (b) and (c) as they apply to the credit under that subsection apply to the credit under this subsection.
209,13 Section 13. 71.07 (2dL) (ar) of the statutes is amended to read:
71.07 (2dL) (ar) If the credit under par. (a) is claimed for an amount expended to acquire property, the property must have been acquired by the claimant after the place where the property is located was designated a development zone under s. 560.71 and the completed project must be placed in service after the claimant is certified for tax benefits under s. 560.765 (3) and the property must not have been previously owned by the claimant or a related person during the period the development zone is in existence or during the 2 years prior to the designation of the development zone under s. 560.71. No credit is allowed for an amount expended to acquire property until the property, either in its original state as acquired by the claimant or as subsequently constructed, rehabilitated, remodeled or repaired, is placed in service.
209,14 Section 14. 71.07 (2dr) of the statutes is created to read:
71.07 (2dr) Development zones research credit. (a) Credit. Any person may credit against taxes otherwise due under this chapter an amount equal to 5% of the amount obtained by subtracting from the person's qualified research expenses, as defined in section 41 of the internal revenue code, except that "qualified research expenses" include only expenses incurred by the claimant in a development zone under subch. VI of ch. 560 and except that "qualified research expenses" do not include compensation used in computing the credit under sub. (2dj) nor research expenses incurred before the claimant is certified for tax benefits under s. 560.765 (3), the person's base amount, as defined in section 41 (c) of the internal revenue code, in a development zone, except that gross receipts used in calculating the base amount means gross receipts from sales attributable to Wisconsin under s. 71.04 (7) (b) 1. and 2. and (d) and research expenses used in calculating the base amount include research expenses incurred before the claimant is certified for tax benefits under s. 560.765 (3), in a development zone, if the claimant submits with the claimant's return a copy of the claimant's certification for tax benefits under s. 560.765 (3) and a statement from the department of commerce verifying the claimant's qualified research expenses for research conducted exclusively in a development zone. The rules under s. 73.03 (35) apply to the credit under this paragraph. The rules under sub. (2di) (f) and (g), as they apply to the credit under that subsection, apply to claims under this paragraph. Section 41 (h) of the internal revenue code does not apply to the credit under this paragraph.
(b) Development opportunity zones. The development zones research credit under par. (a), as it applies to a person certified under s. 560.765 (3), applies to a person that conducts economic activity in a development opportunity zone under s. 560.795 (1) and that is entitled to tax benefits under s. 560.795 (3), subject to the limits under s. 560.795 (2). A development opportunity zone credit under this paragraph may be calculated using expenses incurred by a claimant beginning on the effective date under s. 560.795 (2) (a) of the development opportunity zone designation of the area in which the claimant conducts economic activity.
(bm) Adjustments. Adjustments for acquisitions and dispositions of a major portion of a trade or business shall be made under section 41 of the internal revenue code as limited by this subsection.
(c) Annualization. In the case of any short taxable year, qualified research expenses shall be annualized as prescribed by the department of revenue.
(d) Proration. If a portion of qualified research expenses is incurred partly within and partly outside this state and the amount incurred in this state cannot be accurately determined, a portion of the qualified expenses shall be reasonably allocated to this state. Expenses incurred entirely outside this state for the benefit of research in this state are not allocable to this state under this paragraph.
(e) Change of business or ownership. In the case of a change in ownership or business of a person, section 383 of the internal revenue code, as limited by this subsection, applies to the carry-over of unused credits.
(f) Carry-over. If a credit computed under this subsection is not entirely offset against Wisconsin income or franchise taxes otherwise due, the unused balance may be carried forward and credited against Wisconsin income or franchise taxes otherwise due for the following 15 taxable years to the extent not offset by these taxes otherwise due in all intervening years between the year in which the expense was incurred and the year in which the carry-forward credit is claimed.
(g) Administration. The department of revenue has full power to administer the credits provided in this subsection and may take any action, conduct any proceeding and proceed as it is authorized in respect to income and franchise taxes imposed in this chapter. The income and franchise tax provisions in this chapter relating to assessments, refunds, appeals, collection, interest and penalties apply to the credits under this subsection.
(h) Timely claim. No credit may be allowed under this subsection unless it is claimed within the period specified in s. 71.75 (2).
(i) Nonclaimants. The credits under this subsection may not be claimed by a partnership, except a publicly traded partnership treated as a corporation under s. 71.22 (1), limited liability company, except a limited liability company treated as a corporation under s. 71.22 (1), or tax-option corporation or by partners, including partners of a publicly traded partnership, members of a limited liability company or shareholders of a tax-option corporation.
209,15 Section 15. 71.07 (2ds) (c) of the statutes, as affected by 1995 Wisconsin Act 27, is repealed.
209,16 Section 16. 71.07 (2ds) (h) of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.07 (2ds) (h) For claims based on activity in a zone under s. 560.797, the The rules under sub. (2di) (b) and (c) as they apply to the credit under that subsection apply to the credit under this subsection.
209,17 Section 17. 71.08 (1) (intro.) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:
71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2fd), (3m), (6) and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1fd) and (2m) and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1fd) and (2m) and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:
209,18 Section 18. 71.10 (4) (gd) of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.10 (4) (gd) Development zones jobs credit under s. 71.07 (2dj) if the credit is based on activity in a zone under s. 560.797.
209,19 Section 19. 71.10 (4) (ge) of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.10 (4) (ge) Development zones sales tax credit under s. 71.07 (2ds) if the credit is based on activity in a zone under s. 560.797.
209,20 Section 20. 71.10 (4) (gm) of the statutes is created to read:
71.10 (4) (gm) Development zones research credit under s. 71.07 (2dr).
209,21 Section 21. 71.10 (4) (i) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:
71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under subch. IX, homestead credit under subch. VIII, farmland tax relief credit under s. 71.07 (3m), farmers' drought property tax credit under s. 71.07 (2fd), development zones sales tax credit under s. 71.07 (2ds) unless the credit is based on activity in a zone under s. 560.797, development zones jobs credit under s. 71.07 (2dj) unless the credit is based on activity in a zone under s. 560.797, earned income tax credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld under subch. X.
209,22 Section 22. 71.28 (1dd) (a) 1. of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.28 (1dd) (a) 1. "Day care center benefits" means benefits provided at a day care facility that is licensed under s. 48.65 or 48.69 and that for compensation provides care for at least 6 children or benefits provided at a facility for persons who are physically or mentally incapable of caring for themselves.
209,23 Section 23. 71.28 (1dd) (a) 2. of the statutes, as created by 1995 Wisconsin Act 27, is amended to read:
71.28 (1dd) (a) 2. "Employment-related day care expenses" means amounts paid or incurred by a claimant, during the 2-year period beginning with the day that the member of the targeted group begins work for the claimant, for providing or making day care center benefits available to a qualifying individual in order to enable a member of a targeted group to be employed by the claimant.
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