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2017 - 2018 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 2,
TO ASSEMBLY BILL 259
February 22, 2018 - Offered by Representatives Kooyenga, Katsma and Macco.
AB259-ASA2,2,2 1An Act to amend 71.01 (6) (k) 1., 71.01 (6) (k) 3., 71.05 (6) (b) 28. (intro.), 71.05
2(6) (b) 49. a., 71.05 (6) (b) 49. b., 71.05 (10) (i) 1., 71.05 (23) (b) 2., 71.08 (1) (d),
371.10 (1m) (c), 71.22 (4) (k) 1., 71.22 (4) (k) 3., 71.22 (4m) (k) 1., 71.22 (4m) (k)
43., 71.26 (2) (b) 11. a., 71.26 (2) (b) 11. d., 71.26 (3) (j), 71.30 (2m) (c), 71.34 (1g)
5(k) 1., 71.34 (1g) (k) 3., 71.42 (2) (k) 1., 71.42 (2) (k) 3., 71.80 (1m) (c), 71.98 (3),
673.16 (3) (b), 77.52 (13), 77.53 (10), 77.54 (9m) and 224.50 (2) (a); and to create
771.01 (6) (L), 71.05 (6) (b) 49. k., 71.22 (4) (L), 71.22 (4m) (L), 71.26 (2) (b) 12.,
871.34 (1g) (L), 71.42 (2) (L), 71.98 (9), 73.16 (3) (c) and 77.54 (9a) (fc) of the
9statutes; relating to: the evidentiary standard for proving a transaction has
10economic substance; updating Internal Revenue Code references for state tax
11purposes; clarifying the duties of the College Savings Program Board; a sales
12and use tax exemption for title holding entities for certain tax-exempt
13charitable organizations; computing depletion for income and franchise tax

1purposes; and reliance by a taxpayer on past audits by the Department of
2Revenue.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB259-ASA2,1 3Section 1. 71.01 (6) (k) 1. of the statutes, as created by 2017 Wisconsin Act 59,
4is amended to read:
AB259-ASA2,2,95 71.01 (6) (k) 1. For taxable years beginning after December 31, 2016, and before
6January 1, 2018,
for individuals and fiduciaries, except fiduciaries of nuclear
7decommissioning trust or reserve funds, “Internal Revenue Code" means the federal
8Internal Revenue Code as amended to December 31, 2016, except as provided in
9subds. 2. and 3. and s. 71.98 and subject to subd. 4.
AB259-ASA2,2 10Section 2. 71.01 (6) (k) 3. of the statutes, as created by 2017 Wisconsin Act 59,
11is amended to read:
AB259-ASA2,2,1512 71.01 (6) (k) 3. For purposes of this paragraph, “Internal Revenue Code" does
13not include amendments to the federal Internal Revenue Code enacted after
14December 31, 2016, except that “Internal Revenue Code” includes sections 11024,
1511025, and 13543 of P.L. 115-97
.
AB259-ASA2,3 16Section 3. 71.01 (6) (L) of the statutes is created to read:
AB259-ASA2,2,2117 71.01 (6) (L) 1. For taxable years beginning after December 31, 2017, for
18individuals and fiduciaries, except fiduciaries of nuclear decommissioning trust or
19reserve funds, “Internal Revenue Code" means the federal Internal Revenue Code
20as amended to December 31, 2017, except as provided in subds. 2. and 3. and s. 71.98
21and subject to subd. 4.
AB259-ASA2,3,1622 2. For purposes of this paragraph, “Internal Revenue Code" does not include
23the following provisions of federal public laws for taxable years beginning after

1December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L.
2106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L.
3109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of
4P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L.
5110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section
615351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections
7312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251,
81501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L.
9111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L.
10111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and
11411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division
12P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to
13171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011,
1411012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531,
1513601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214,
1614215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.
AB259-ASA2,3,1817 3. For purposes of this paragraph, “Internal Revenue Code" does not include
18amendments to the federal Internal Revenue Code enacted after December 31, 2017.
AB259-ASA2,3,2119 4. For purposes of this paragraph, the provisions of federal public laws that
20directly or indirectly affect the Internal Revenue Code, as defined in this paragraph,
21apply for Wisconsin purposes at the same time as for federal purposes.
AB259-ASA2,4 22Section 4. 71.05 (6) (b) 28. (intro.) of the statutes, as affected by 2017
23Wisconsin Act 59
, is amended to read:
AB259-ASA2,4,624 71.05 (6) (b) 28. (intro.) An amount paid by a claimant for tuition expenses and
25mandatory student fees for a student who is the claimant or who is the claimant's

1child and the claimant's dependent who is claimed under section 151 (c), as defined
2under section 152
of the Internal Revenue Code, to attend any university, college,
3technical college or a school approved under s. 440.52, that is located in Wisconsin
4or to attend a public vocational school or public institution of higher education in
5Minnesota under the Minnesota-Wisconsin reciprocity agreement under s. 39.47,
6calculated as follows:
AB259-ASA2,5 7Section 5. 71.05 (6) (b) 49. a. of the statutes is amended to read:
AB259-ASA2,4,128 71.05 (6) (b) 49. a. Subject to the definitions provided in subd. 49. b. to g. and
9the limitations specified in subd. 49. h. to j. for taxable years beginning after
10December 31, 2013, and subject to the limitation in subd. 49. k. for taxable years
11beginning after December 31, 2017,
tuition expenses that are paid by a claimant for
12tuition for a pupil to attend an eligible institution.
AB259-ASA2,6 13Section 6. 71.05 (6) (b) 49. b. of the statutes is amended to read:
AB259-ASA2,4,1614 71.05 (6) (b) 49. b. In this subdivision, “claimant" means an individual who
15claims a pupil as a dependent under section 151 (c) , as defined under section 152 of
16the Internal Revenue Code, on his or her tax return.
AB259-ASA2,7 17Section 7. 71.05 (6) (b) 49. k. of the statutes is created to read:
AB259-ASA2,4,2118 71.05 (6) (b) 49. k. For taxable years beginning after December 31, 2017, no
19modification may be claimed under this subdivision for an amount paid for tuition
20expenses, as described under this subdivision, if the source of the payment is an
21amount withdrawn from a college savings account, as described in s. 224.50.
AB259-ASA2,8 22Section 8. 71.05 (10) (i) 1. of the statutes is amended to read:
AB259-ASA2,5,623 71.05 (10) (i) 1. Subject to the conditions in this paragraph, an individual may
24subtract up to $10,000 from federal adjusted gross income if he or she, or his or her
25dependent who is claimed under section 151 (c), as defined under section 152 of the

1Internal Revenue Code, while living, donates one or more of his or her human organs
2to another human being for human organ transplantation, as defined in s. 146.345
3(1), except that in this paragraph, “human organ" means all or part of a liver,
4pancreas, kidney, intestine, lung, or bone marrow. A subtract modification that is
5claimed under this paragraph may be claimed in the taxable year in which the
6human organ transplantation occurs.
AB259-ASA2,9 7Section 9. 71.05 (23) (b) 2. of the statutes is amended to read:
AB259-ASA2,5,118 71.05 (23) (b) 2. An exemption of $700 for each individual for whom the
9taxpayer is entitled to an exemption for the taxable year under section 151 (c)

10dependent, as defined under section 152 of the Internal Revenue Code, of the
11taxpayer
.
AB259-ASA2,10 12Section 10. 71.08 (1) (d) of the statutes is amended to read:
AB259-ASA2,5,2013 71.08 (1) (d) Subtract from the amount under par. (c) the appropriate amount
14under section 55 (d) (1), (3), and (4) of the federal Internal Revenue Code in effect for
15the taxable year; except that surviving spouses shall be treated as single individuals;
16except that the amount under par. (c), not the federal alternative minimum taxable
17income, shall be used in calculating the phase-out and except that for nonresidents
18and part-year residents the amount under section 55 (d) (1), (3), and (4) of the federal
19Internal Revenue Code in effect for the taxable year shall be prorated on the basis
20of the ratio of Wisconsin adjusted gross income to federal adjusted gross income.
AB259-ASA2,11 21Section 11. 71.10 (1m) (c) of the statutes is amended to read:
AB259-ASA2,6,222 71.10 (1m) (c) With respect to transactions a transaction between members of
23a controlled group, as defined in section 267 (f) (1) of the Internal Revenue Code, such
24transactions
the transaction shall be presumed to lack economic substance, and the
25taxpayer shall bear the burden of establishing by clear and convincing satisfactory

1evidence that a the transaction or a the series of transactions between the taxpayer
2and one or more members of the controlled group has economic substance.
AB259-ASA2,12 3Section 12. 71.22 (4) (k) 1. of the statutes, as created by 2017 Wisconsin Act
459
, is amended to read:
AB259-ASA2,6,95 71.22 (4) (k) 1. For taxable years beginning after December 31, 2016, and before
6January 1, 2018,
“Internal Revenue Code" means the federal Internal Revenue Code
7as amended to December 31, 2016, except as provided in subds. 2. and 3. and subject
8to subd. 4., and except as provided in sub. (4m) and ss. 71.26 (2) (b) and (3), 71.34 (1g),
971.42 (2), and 71.98.
AB259-ASA2,13 10Section 13. 71.22 (4) (k) 3. of the statutes, as created by 2017 Wisconsin Act
1159
, is amended to read:
AB259-ASA2,6,1512 71.22 (4) (k) 3. For purposes of this paragraph, “Internal Revenue Code" does
13not include amendments to the federal Internal Revenue Code enacted after
14December 31, 2016, except that “Internal Revenue Code” includes sections 11024,
1511025, and 13543 of P.L. 115-97
.
AB259-ASA2,14 16Section 14. 71.22 (4) (L) of the statutes is created to read:
AB259-ASA2,6,2017 71.22 (4) (L) 1. For taxable years beginning after December 31, 2017, “Internal
18Revenue Code" means the federal Internal Revenue Code as amended to December
1931, 2017, except as provided in subds. 2. and 3. and subject to subd. 4., and except
20as provided in sub. (4m) and ss. 71.26 (2) (b) and (3), 71.34 (1g), 71.42 (2), and 71.98.
AB259-ASA2,7,1321 2. For purposes of this paragraph, “Internal Revenue Code" does not include
22the following provisions of federal public laws for taxable years beginning after
23December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L.
24106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L.
25109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of

1P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L.
2110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section
315351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections
4312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251,
51501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L.
6111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L.
7111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and
8411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division
9P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to
10171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011,
1111012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531,
1213601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214,
1314215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.
AB259-ASA2,7,1514 3. For purposes of this paragraph, “Internal Revenue Code" does not include
15amendments to the federal Internal Revenue Code enacted after December 31, 2017.
AB259-ASA2,7,1816 4. For purposes of this paragraph, the provisions of federal public laws that
17directly or indirectly affect the Internal Revenue Code, as defined in this paragraph,
18apply for Wisconsin purposes at the same time as for federal purposes.
AB259-ASA2,15 19Section 15. 71.22 (4m) (k) 1. of the statutes, as created by 2017 Wisconsin Act
2059
, is amended to read:
AB259-ASA2,7,2521 71.22 (4m) (k) 1. For taxable years beginning after December 31, 2016, and
22before January 1, 2018,
“Internal Revenue Code", for corporations that are subject
23to a tax on unrelated business income under s. 71.26 (1) (a), means the federal
24Internal Revenue Code as amended to December 31, 2016, except as provided in
25subds. 2. and 3. and s. 71.98 and subject to subd. 4.
AB259-ASA2,16
1Section 16. 71.22 (4m) (k) 3. of the statutes, as created by 2017 Wisconsin Act
259
, is amended to read:
AB259-ASA2,8,63 71.22 (4m) (k) 3. For purposes of this paragraph, “Internal Revenue Code" does
4not include amendments to the federal Internal Revenue Code enacted after
5December 31, 2016, except that “Internal Revenue Code” includes sections 11024,
611025, and 13543 of P.L. 115-97
.
AB259-ASA2,17 7Section 17. 71.22 (4m) (L) of the statutes is created to read:
AB259-ASA2,8,128 71.22 (4m) (L) 1. For taxable years beginning after December 31, 2017,
9“Internal Revenue Code", for corporations that are subject to a tax on unrelated
10business income under s. 71.26 (1) (a), means the federal Internal Revenue Code as
11amended to December 31, 2017, except as provided in subds. 2. and 3. and s. 71.98
12and subject to subd. 4.
AB259-ASA2,9,513 2. For purposes of this paragraph, “Internal Revenue Code" does not include
14the following provisions of federal public laws for taxable years beginning after
15December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L.
16106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L.
17109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of
18P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L.
19110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section
2015351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections
21312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251,
221501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L.
23111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L.
24111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and
25411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division

1P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to
2171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011,
311012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531,
413601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214,
514215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.
AB259-ASA2,9,76 3. For purposes of this paragraph, “Internal Revenue Code" does not include
7amendments to the federal Internal Revenue Code enacted after December 31, 2017.
AB259-ASA2,9,108 4. For purposes of this paragraph, the provisions of federal public laws that
9directly or indirectly affect the Internal Revenue Code, as defined in this paragraph,
10apply for Wisconsin purposes at the same time as for federal purposes.
AB259-ASA2,18 11Section 18. 71.26 (2) (b) 11. a. of the statutes, as created by 2017 Wisconsin
12Act 59
, is amended to read:
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