LRB-4091/1
JK:lmk:rs
2007 - 2008 LEGISLATURE
March 4, 2008 - Introduced by Senators Plale, Kanavas, Kapanke, Darling,
Roessler, Schultz
and Hansen, cosponsored by Representatives Strachota,
Zepnick, Molepske, Vos, F. Lasee, Sheridan, Berceau, Moulton, Van Roy,
Seidel
and Hahn. Referred to Committee on Commerce, Utilities and Rail.
SB556,1,5 1An Act to amend 71.07 (5f) (b) 1., 71.28 (5f) (b) 1. and 71.47 (5f) (b) 1.; and to
2create
71.07 (5f) (e) and (f), 71.07 (5h) (e) and (f), 71.28 (5f) (e) and (f), 71.28 (5h)
3(e) and (f), 71.47 (5f) (e) and (f), 71.47 (5h) (e) and (f) and 560.206 (5) of the
4statutes; relating to: the transfer of, and the and residency requirements
5under, the film production tax credits.
Analysis by the Legislative Reference Bureau
Under current law, a film production company may claim income and franchise
tax credits for expenses related to film production services, including a percentage
of the salary or wages paid to the company's employees in this state, and for capital
investments made in this state by the film production company. This bill allows a
film production company to transfer its film production tax credits to other taxpayers
who may claim the credits against their state income and franchise tax liability.
Under current law, the amount of the credit that a film production company
may claim for salary or wages is limited to the first $25,000 paid to each of the
company's employees who were residents of this state at the time that they were paid.
Under the bill, for taxable years beginning after December 31, 2007, and before
January 1, 2010, the company may claim credits for employees who are not residents
of this state at the time that they were paid. However, for taxable years beginning
after December 31, 2009, and before January 1, 2014, a film production company may
claim credits for employees who are not residents of this state at the time that they
were paid, only if the Department of Commerce (Commerce) certifies that at least 25

percent of the company's employees were residents of this state at the time that they
were paid. For taxable years beginning on or after January 1, 2014, a film production
company may claim credits for employees who are not residents of this state at the
time that they were paid, only if Commerce certifies that at least 50 percent of the
company's employees were residents of this state at the time that they were paid.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB556, s. 1 1Section 1. 71.07 (5f) (b) 1. of the statutes is amended to read:
SB556,2,52 71.07 (5f) (b) 1. An amount equal to 25 percent of the salary or wages paid by
3the claimant to the claimant's employees in the taxable year for services rendered in
4this state to produce an accredited production and, subject to s. 560.206 (5), paid to
5employees who were residents of this state at the time that they were paid.
SB556, s. 2 6Section 2. 71.07 (5f) (e) and (f) of the statutes are created to read:
SB556,2,107 71.07 (5f) (e) Transfer of credits. 1. Any person who is eligible to claim a credit
8under this subsection, as approved by the department of commerce, may, instead of
9claiming the credit, transfer the credit amount, in whole or in part, to another person
10who is subject to the taxes imposed under s. 71.02, 71.23, or 71.43.
SB556,2,1311 2. A person who transfers credit amounts under subd. 1. may make no more
12than 3 such transfers in any calendar year, but a single transfer may involve one or
13more transferees.
SB556,3,1714 3. A person who intends to transfer credit amounts under subd. 1. shall submit
15to the department of revenue an application that provides the transferor's tax credit
16balance under this subsection before and after the requested transfer, all tax
17identification numbers for the transferor and the transferee, the intended date of the
18transfer, the amount transferred, and any other information required by the

1department. The intended transferee of such credits shall submit to the department
2of revenue an application that provides any information required by the department.
3The person requesting to transfer the credits and the requesting transferee shall
4each pay to the department of revenue a fee in an amount equal to 1 percent of the
5credit amounts requested to be transferred or $500, whichever is less. The person
6requesting to transfer the credits shall pay to the department of commerce a fee in
7an amount equal to 2 percent of the credit amounts requested to be transferred or
8$5,000, whichever is less. The department of revenue shall certify the transfer before
9the transfer takes place. The department of revenue shall not issue a certification
10to either party if either the transferor or transferee has not met all Wisconsin tax
11return filing, withholding, and payment obligations. The transferor and transferee
12shall, at the time that each of them file a Wisconsin income or franchise tax return
13for the taxable year in which the transfer takes place, attach a copy of the
14certification to the return and submit a copy of the certification to the department
15of commerce. The transferee shall attach a copy of the certification to its Wisconsin
16income or franchise tax return for each taxable year in which the transferee claims
17the credit transferred pursuant to this subdivision.
SB556,3,2118 4. The transfer of any credit amount under subd. 1. does not extend the time
19in which the credit may be claimed and the carry-forward period for any credit
20amount that is transferred begins with the first taxable year in which the transferor
21is eligible to receive the credit on which the transfer is based.
SB556,4,222 5. A transferee shall have only such rights to claim the credit amounts that
23were available to the transferor at the time of the transfer. To the extent that the
24transferor was not eligible to claim the credit at the time of the transfer, the
25department of revenue shall disallow the credit amount claimed by the transferee

1or recapture the credit amount from the transferee and the transferee shall have no
2recourse against the department of revenue or the department of commerce.
SB556,4,73 6. Any consideration paid for a transfer of credit amounts under subd. 1. shall
4not be deducted from income, and any consideration received from the transfer shall
5not be included as income. The transferor may not subtract any amount of credit
6previously added back to income under s. 71.05 (6) (a) 15., 71.26 (2) (a), 71.45 (2) (a)
710., or 77.92 (4).
SB556,4,128 (f) Reports. Annually, no later than April 1, the department of revenue shall,
9in consultation with the department of commerce, submit to the joint committee on
10finance a report assessing the use of the credit under this subsection, including the
11provisions allowing a claimant to transfer such credits to another person. The report
12shall contain all of the following information, subject to s. 71.78:
SB556,4,1513 1. The number of persons who obtained the credit in the previous fiscal year
14without transferring such credit, regardless of whether the person was able to claim
15the credit as an offset against Wisconsin income or franchise taxes.
SB556,4,1916 2. The number of persons who received the credit in the previous fiscal year that
17was transferred from another person, regardless of when the credits were originally
18obtained by the transferor and regardless of whether the transferee was able to claim
19the credit as an offset against Wisconsin income or franchise taxes.
SB556,4,2120 3. The total amount of the credit that was claimed as an offset against the tax
21liability of persons described in subd. 1. in the previous fiscal year.
SB556,4,2322 4. The total amount of credit that was claimed as an offset against the tax
23liability of persons described in subd. 2. in the previous fiscal year.
SB556,5,3
15. A description of any material noncompliance identified by the department
2of revenue or the department of commerce regarding the claiming of the credit by
3persons described in subds. 1. and 2.
SB556, s. 3 4Section 3. 71.07 (5h) (e) and (f) of the statutes are created to read:
SB556,5,85 71.07 (5h) (e) Transfer of credits. 1. Any person who is eligible to claim a credit
6under this subsection, as approved by the department of commerce, may, instead of
7claiming the credit, transfer the credit amount, in whole or in part, to another person
8who is subject to the taxes imposed under s. 71.02, 71.23, or 71.43.
SB556,5,119 2. A person who transfers credit amounts under subd. 1. may make no more
10than 3 such transfers in any calendar year, but a single transfer may involve one or
11more transferees.
SB556,6,812 3. A person who intends to transfer credit amounts under subd. 1. shall submit
13to the department of revenue an application that provides the transferor's tax credit
14balance under this subsection before and after the requested transfer, all tax
15identification numbers for the transferor and the transferee, the intended date of the
16transfer, the amount transferred, and any other information required by the
17department. The intended transferee of such credits shall submit to the department
18of revenue an application that provides any information required by the department.
19The person requesting to transfer the credits and the requesting transferee shall
20each pay to the department of revenue a fee in an amount equal to 1 percent of the
21credit amounts requested to be transferred or $500, whichever is less. The person
22requesting to transfer the credits shall pay to the department of commerce a fee in
23an amount equal to 2 percent of the credit amounts requested to be transferred or
24$5,000, whichever is less. The department of revenue shall certify the transfer before
25the transfer takes place. The department of revenue shall not issue a certification

1to either party if either the transferor or transferee has not met all Wisconsin tax
2return filing, withholding, and payment obligations. The transferor and transferee
3shall, at the time that each of them file a Wisconsin income or franchise tax return
4for the taxable year in which the transfer takes place, attach a copy of the
5certification to the return and submit a copy of the certification to the department
6of commerce. The transferee shall attach a copy of the certification to its Wisconsin
7income or franchise tax return for each taxable year in which the transferee claims
8the credit transferred pursuant to this subdivision.
SB556,6,129 4. The transfer of any credit amount under subd. 1. does not extend the time
10in which the credit may be claimed and the carry-forward period for any credit
11amount that is transferred begins with the first taxable year in which the transferor
12is eligible to receive the credit on which the transfer is based.
SB556,6,1813 5. A transferee shall have only such rights to claim the credit amounts that
14were available to the transferor at the time of the transfer. To the extent that the
15transferor was not eligible to claim the credit at the time of the transfer, the
16department of revenue shall disallow the credit amount claimed by the transferee
17or recapture the credit amount from the transferee and the transferee shall have no
18recourse against the department of revenue or the department of commerce.
SB556,6,2319 6. Any consideration paid for a transfer of credit amounts under subd. 1. shall
20not be deducted from income, and any consideration received from the transfer shall
21not be included as income. The transferor may not subtract any amount of credit
22previously added back to income under s. 71.05 (6) (a) 15., 71.26 (2) (a), 71.45 (2) (a)
2310., or 77.92 (4).
SB556,7,324 (f) Reports. Annually, no later than April 1, the department of revenue shall,
25in consultation with the department of commerce, submit to the joint committee on

1finance a report assessing the use of the credit under this subsection, including the
2provisions allowing a claimant to transfer such credits to another person. The report
3shall contain all of the following information, subject to s. 71.78:
SB556,7,64 1. The number of persons who obtained the credit in the previous fiscal year
5without transferring such credit, regardless of whether the person was able to claim
6the credit as an offset against Wisconsin income or franchise taxes.
SB556,7,107 2. The number of persons who received the credit in the previous fiscal year that
8was transferred from another person, regardless of when the credits were originally
9obtained by the transferor and regardless of whether the transferee was able to claim
10the credit as an offset against Wisconsin income or franchise taxes.
SB556,7,1211 3. The total amount of the credit that was claimed as an offset against the tax
12liability of persons described in subd. 1. in the previous fiscal year.
SB556,7,1413 4. The total amount of credit that was claimed as an offset against the tax
14liability of persons described in subd. 2. in the previous fiscal year.
SB556,7,1715 5. A description of any material noncompliance identified by the department
16of revenue or the department of commerce regarding the claiming of the credit by
17persons described in subds. 1. and 2.
SB556, s. 4 18Section 4. 71.28 (5f) (b) 1. of the statutes is amended to read:
SB556,7,2219 71.28 (5f) (b) 1. An amount equal to 25 percent of the salary or wages paid by
20the claimant to the claimant's employees in the taxable year for services rendered in
21this state to produce an accredited production and, subject to s. 560.206 (5), paid to
22employees who were residents of this state at the time that they were paid.
SB556, s. 5 23Section 5. 71.28 (5f) (e) and (f) of the statutes are created to read:
SB556,8,224 71.28 (5f) (e) Transfer of credits. 1. Any person who is eligible to claim a credit
25under this subsection, as approved by the department of commerce, may, instead of

1claiming the credit, transfer the credit amount, in whole or in part, to another person
2who is subject to the taxes imposed under s. 71.02, 71.23, or 71.43.
SB556,8,53 2. A person who transfers credit amounts under subd. 1. may make no more
4than 3 such transfers in any calendar year, but a single transfer may involve one or
5more transferees.
SB556,9,26 3. A person who intends to transfer credit amounts under subd. 1. shall submit
7to the department of revenue an application that provides the transferor's tax credit
8balance under this subsection before and after the requested transfer, all tax
9identification numbers for the transferor and the transferee, the intended date of the
10transfer, the amount transferred, and any other information required by the
11department. The intended transferee of such credits shall submit to the department
12of revenue an application that provides any information required by the department.
13The person requesting to transfer the credits and the requesting transferee shall
14each pay to the department of revenue a fee in an amount equal to 1 percent of the
15credit amounts requested to be transferred or $500, whichever is less. The person
16requesting to transfer the credits shall pay to the department of commerce a fee in
17an amount equal to 2 percent of the credit amounts requested to be transferred or
18$5,000, whichever is less. The department of revenue shall certify the transfer before
19the transfer takes place. The department of revenue shall not issue a certification
20to either party if either the transferor or transferee has not met all Wisconsin tax
21return filing, withholding, and payment obligations. The transferor and transferee
22shall, at the time that each of them file a Wisconsin income or franchise tax return
23for the taxable year in which the transfer takes place, attach a copy of the
24certification to the return and submit a copy of the certification to the department
25of commerce. The transferee shall attach a copy of the certification to its Wisconsin

1income or franchise tax return for each taxable year in which the transferee claims
2the credit transferred pursuant to this subdivision.
SB556,9,63 4. The transfer of any credit amount under subd. 1. does not extend the time
4in which the credit may be claimed and the carry-forward period for any credit
5amount that is transferred begins with the first taxable year in which the transferor
6is eligible to receive the credit on which the transfer is based.
SB556,9,127 5. A transferee shall have only such rights to claim the credit amounts that
8were available to the transferor at the time of the transfer. To the extent that the
9transferor was not eligible to claim the credit at the time of the transfer, the
10department of revenue shall disallow the credit amount claimed by the transferee
11or recapture the credit amount from the transferee and the transferee shall have no
12recourse against the department of revenue or the department of commerce.
SB556,9,1713 6. Any consideration paid for a transfer of credit amounts under subd. 1. shall
14not be deducted from income, and any consideration received from the transfer shall
15not be included as income. The transferor may not subtract any amount of credit
16previously added back to income under s. 71.05 (6) (a) 15., 71.26 (2) (a), 71.45 (2) (a)
1710., or 77.92 (4).
SB556,9,2218 (f) Reports. Annually, no later than April 1, the department of revenue shall,
19in consultation with the department of commerce, submit to the joint committee on
20finance a report assessing the use of the credit under this subsection, including the
21provisions allowing a claimant to transfer such credits to another person. The report
22shall contain all of the following information, subject to s. 71.78:
SB556,9,2523 1. The number of persons who obtained the credit in the previous fiscal year
24without transferring such credit, regardless of whether the person was able to claim
25the credit as an offset against Wisconsin income or franchise taxes.
SB556,10,4
12. The number of persons who received the credit in the previous fiscal year that
2was transferred from another person, regardless of when the credits were originally
3obtained by the transferor and regardless of whether the transferee was able to claim
4the credit as an offset against Wisconsin income or franchise taxes.
SB556,10,65 3. The total amount of the credit that was claimed as an offset against the tax
6liability of persons described in subd. 1. in the previous fiscal year.
SB556,10,87 4. The total amount of credit that was claimed as an offset against the tax
8liability of persons described in subd. 2. in the previous fiscal year.
SB556,10,119 5. A description of any material noncompliance identified by the department of
10revenue or the department of commerce regarding the claiming of the credit by
11persons described in subd. 1. and 2.
SB556, s. 6 12Section 6. 71.28 (5h) (e) and (f) of the statutes are created to read:
SB556,10,1613 71.28 (5h) (e) Transfer of credits. 1. Any person who is eligible to claim a credit
14under this subsection, as approved by the department of commerce, may, instead of
15claiming the credit, transfer the credit amount, in whole or in part, to another person
16who is subject to the taxes imposed under s. 71.02, 71.23, or 71.43.
SB556,10,1917 2. A person who transfers credit amounts under subd. 1. may make no more
18than 3 such transfers in any calendar year, but a single transfer may involve one or
19more transferees.
SB556,11,1620 3. A person who intends to transfer credit amounts under subd. 1. shall submit
21to the department of revenue an application that provides the transferor's tax credit
22balance under this subsection before and after the requested transfer, all tax
23identification numbers for the transferor and the transferee, the intended date of the
24transfer, the amount transferred, and any other information required by the
25department. The intended transferee of such credits shall submit to the department

1of revenue an application that provides any information required by the department.
2The person requesting to transfer the credits and the requesting transferee shall
3each pay to the department of revenue a fee in an amount equal to 1 percent of the
4credit amounts requested to be transferred or $500, whichever is less. The person
5requesting to transfer the credits shall pay to the department of commerce a fee in
6an amount equal to 2 percent of the credit amounts requested to be transferred or
7$5,000, whichever is less. The department of revenue shall certify the transfer before
8the transfer takes place. The department of revenue shall not issue a certification
9to either party if either the transferor or transferee has not met all Wisconsin tax
10return filing, withholding, and payment obligations. The transferor and transferee
11shall, at the time that each of them file a Wisconsin income or franchise tax return
12for the taxable year in which the transfer takes place, attach a copy of the
13certification to the return and submit a copy of the certification to the department
14of commerce. The transferee shall attach a copy of the certification to its Wisconsin
15income or franchise tax return for each taxable year in which the transferee claims
16the credit transferred pursuant to this subdivision.
SB556,11,2017 4. The transfer of any credit amount under subd. 1. does not extend the time
18in which the credit may be claimed and the carry-forward period for any credit
19amount that is transferred begins with the first taxable year in which the transferor
20is eligible to receive the credit on which the transfer is based.
SB556,12,221 5. A transferee shall have only such rights to claim the credit amounts that
22were available to the transferor at the time of the transfer. To the extent that the
23transferor was not eligible to claim the credit at the time of the transfer, the
24department of revenue shall disallow the credit amount claimed by the transferee

1or recapture the credit amount from the transferee and the transferee shall have no
2recourse against the department of revenue or the department of commerce.
SB556,12,73 6. Any consideration paid for a transfer of credit amounts under subd. 1. shall
4not be deducted from income, and any consideration received from the transfer shall
5not be included as income. The transferor may not subtract any amount of credit
6previously added back to income under s. 71.05 (6) (a) 15., 71.26 (2) (a), 71.45 (2) (a)
710., or 77.92 (4).
SB556,12,128 (f) Reports. Annually, no later than April 1, the department of revenue shall,
9in consultation with the department of commerce, submit to the joint committee on
10finance a report assessing the use of the credit under this subsection, including the
11provisions allowing a claimant to transfer such credits to another person. The report
12shall contain all of the following information, subject to s. 71.78:
SB556,12,1513 1. The number of persons who obtained the credit in the previous fiscal year
14without transferring such credit, regardless of whether the person was able to claim
15the credit as an offset against Wisconsin income or franchise taxes.
SB556,12,1916 2. The number of persons who received the credit in the previous fiscal year that
17was transferred from another person, regardless of when the credits were originally
18obtained by the transferor and regardless of whether the transferee was able to claim
19the credit as an offset against Wisconsin income or franchise taxes.
SB556,12,2120 3. The total amount of the credit that was claimed as an offset against the tax
21liability of persons described in subd. 1. in the previous fiscal year.
SB556,12,2322 4. The total amount of credit that was claimed as an offset against the tax
23liability of persons described in subd. 2. in the previous fiscal year.
SB556,13,3
15. A description of any material noncompliance identified by the department
2of revenue or the department of commerce regarding the claiming of the credit by
3persons described in subds. 1. and 2.
SB556, s. 7 4Section 7. 71.47 (5f) (b) 1. of the statutes is amended to read:
SB556,13,85 71.47 (5f) (b) 1. An amount equal to 25 percent of the salary or wages paid by
6the claimant to the claimant's employees in the taxable year for services rendered in
7this state to produce an accredited production and, subject to s. 560.206 (5), paid to
8employees who were residents of this state at the time that they were paid.
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