1997 Wisconsin Act 27

27,2261e Section 2261e. 71.06 (1) (intro.) of the statutes is amended to read:

71.06 (1) (title) Fiduciaries, single individuals and heads of households; 1986 to 1997. (intro.) The tax to be assessed, levied and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals for taxable years beginning on or after August 1, 1986, and before January 1, 1994, and upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households for taxable years beginning on or after January 1, 1994 December 31, 1993, and before January 1, 1998, shall be computed at the following rates:

27,2261ee Section 2261ee. 71.06 (1m) of the statutes is created to read:

71.06 (1m) Fiduciaries, single individuals and heads of households; after 1997. The tax to be assessed, levied and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 1997:

(a) On all taxable income from $0 to $7,500, 4.85%.

(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.48%.

(c) On all taxable income exceeding $15,000, 6.87%.

27,2261eg Section 2261eg. 71.06 (2) (intro.) of the statutes is amended to read:

71.06 (2) Married persons. (intro.) The tax to be assessed, levied and collected upon the taxable incomes of all married persons for calendar year 1987 and corresponding fiscal years and for calendar and fiscal years thereafter shall be computed at the following rates:

27,2261ei Section 2261ei. 71.06 (2) (a) (intro.) of the statutes is amended to read:

71.06 (2) (a) (intro.) For joint returns, for taxable years beginning after July 31, 1986, and before January 1, 1998:

27,2261ek Section 2261ek. 71.06 (2) (b) (intro.) of the statutes is amended to read:

71.06 (2) (b) (intro.) For married persons filing separately, for taxable years beginning after July 31, 1986, and before January 1, 1998:

27,2261eL Section 2261eL. 71.06 (2) (c) of the statutes is created to read:

71.06 (2) (c) For joint returns, for taxable years beginning after December 31, 1997:

1. On all taxable income from $0 to $10,000, 4.85%.

2. On all taxable income exceeding $10,000 but not exceeding $20,000, 6.48%.

3. On all taxable income exceeding $20,000, 6.87%.

27,2261em Section 2261em. 71.06 (2) (d) of the statutes is created to read:

71.06 (2) (d) For married persons filing separately, for taxable years beginning after December 31, 1997:

1. On all taxable income from $0 to $5,000, 4.85%.

2. On all taxable income exceeding $5,000 but not exceeding $10,000, 6.48%.

3. On all taxable income exceeding $10,000, 6.87%.

27,2261en Section 2261en. 71.06 (2e) of the statutes is created to read:

71.06 (2e) Bracket indexing. For taxable years beginning after December 31, 1998, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1m) and (2) (c) and (d) shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the year before the previous year, as determined by the federal department of labor. Each amount that is revised under this subsection shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this subsection and incorporate the changes into the income tax forms and instructions.

27,2261eo Section 2261eo. 71.06 (2m) of the statutes is amended to read:

71.06 (2m) Rate changes. If a rate under sub. (1), (1m) or (2) changes during a taxable year, the taxpayer shall compute the tax for that taxable year by the methods applicable to the federal income tax under section 15 of the internal revenue code.

27,2261f Section 2261f. 71.06 (2s) of the statutes is created to read:

71.06 (2s) Nonresidents and part-year residents. For taxable years beginning after December 31, 1996, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under subs. (1) and (2) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this subsection, for married persons filing separately “adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly “adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under subs. (1) and (2) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.

27,2261fm Section 2261fm. 71.06 (2s) of the statutes, as created by 1997 Wisconsin Act .... (this act), is renumbered 71.06 (2s) (a) and amended to read:

71.06 (2s) (a) For taxable years beginning after December 31, 1996, and ending before January 1, 1998, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under subs. (1) and (2) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this subsection paragraph, for married persons filing separately “adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly “adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under subs. (1) and (2) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.

27,2261fn Section 2261fn. 71.06 (2s) (b) of the statutes is created to read:

71.06 (2s) (b) For taxable years beginning after December 31, 1997, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under subs. (1m) and (2) (c) and (d) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this paragraph, for married persons filing separately “adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly “adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under subs. (1m) and (2) (c) and (d) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.

27,2261h Section 2261h. 71.07 (2dd) (e) of the statutes is created to read:

71.07 (2dd) (e) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

27,2261j Section 2261j. 71.07 (2de) (d) of the statutes is created to read:

71.07 (2de) (d) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

27,2261k Section 2261k. 71.07 (2di) (i) of the statutes is created to read:

71.07 (2di) (i) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

27,2261m Section 2261m. 71.07 (2dj) (i) of the statutes is created to read:

71.07 (2dj) (i) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

27,2261p Section 2261p. 71.07 (2dL) (h) of the statutes is created to read:

71.07 (2dL) (h) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

27,2261q Section 2261q. 71.07 (2dr) (a) of the statutes is amended to read:

71.07 (2dr) (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, except that a taxpayer may elect the alternative computation under section 41 (c) (4) of the Internal Revenue Code and that election applies until the department permits its revocation 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.

27,2261t Section 2261t. 71.07 (2dr) (i) of the statutes is created to read:

71.07 (2dr) (i) Sunset. No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

27,2261v Section 2261v. 71.07 (2ds) (i) of the statutes is created to read:

71.07 (2ds) (i) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

27,2262 Section 2262 . 71.07 (2dx) of the statutes is created to read:

71.07 (2dx) Development zones credit. (a) Definitions. In this subsection:

1. “Brownfield" means an industrial or commercial facility the expansion or redevelopment of which is complicated by environmental contamination.

2. “Development zone" means a development zone under s. 560.70, a development opportunity zone under s. 560.795 or an enterprise development zone under s. 560.797.

3. “Environmental remediation" means removal or containment of environmental pollution, as defined in s. 299.01 (4), and restoration of soil or groundwater that is affected by environmental pollution, as defined in s. 299.01 (4), in a brownfield if that removal, containment or restoration fulfills the requirement under sub. (2de) (a) 1. and investigation unless the investigation determines that remediation is required and that remediation is not undertaken.

4. “Full-time job" means a regular, nonseasonal full-time position in which an individual, as a condition of employment, is required to work at least 2,080 hours per year, including paid leave and holidays, and for which the individual receives pay that is equal to at least 150% of the federal minimum wage and receives benefits that are not required by federal or state law. “Full-time job" does not include initial training before an employment position begins.

5. “Member of a targeted group" means a person under sub. (2dj) (am) 1., a person who resides in an empowerment zone, or an enterprise community, that the U.S. government designates, a person who is employed in an unsubsidized job but meets the eligibility requirements under s. 49.145 (2) and (3) for a Wisconsin works employment position, a person who is employed in a trial job, as defined in s. 49.141 (1) (n), a person who is eligible for the Wisconsin works health plan under s. 49.153 or a person who is eligible for child care assistance under s. 49.155; if the person has been certified in the manner under sub. (2dj) (am) 3. by a designated local agency, as defined in sub. (2dj) (am) 2.

(b) Credit. Except as provided in s. 73.03 (35) and subject to s. 560.785, for any taxable year for which the person is certified under s. 560.765 (3), any person may claim as a credit against taxes the following amounts:

1. Fifty percent of the amount expended for environmental remediation in a development zone.

2. The amount determined by multiplying the amount determined under s. 560.785 (1) (b) by the number of full-time jobs created in a development zone and filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

3. The amount determined by multiplying the amount determined under s. 560.785 (1) (c) by the number of full-time jobs created in a development zone and not filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

4. The amount determined by multiplying the amount determined under s. 560.785 (1) (b) by the number of full-time jobs retained, as provided in the rules under s. 560.785, excluding jobs for which a credit has been claimed under sub. (2dj), in a development zone and filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

5. The amount determined by multiplying the amount determined under s. 560.785 (1) (c) by the number of full-time jobs retained, as provided in the rules under s. 560.785, excluding jobs for which a credit has been claimed under sub. (2dj), in a development zone and not filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

(c) Credit precluded. If the certification of a person for tax benefits under s. 560.765 (3) is revoked, that person may not claim credits under this subsection for the taxable year that includes the day on which the certification is revoked or succeeding taxable years and that person may not carry over unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which certification is revoked or succeeding taxable years.

(d) Carry-over precluded. If a person who is certified under s. 560.765 (3) for tax benefits ceases business operations in the development zone during any of the taxable years that that zone exists, that person may not carry over to any taxable year following the year during which operations cease any unused credits from the taxable year during which operations cease or from previous taxable years.

(e) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection. Subsection (2dj) (c), as it applies to the credit under sub. (2dj), applies to the credit under this subsection. Claimants shall include with their returns a copy of their certification for tax benefits and a copy of the department of commerce's verification of their expenses.

27,2262m Section 2262m. 71.07 (3s) of the statutes is created to read:

71.07 (3s) Manufacturing sales tax credit. (a) In this subsection:

1. “Manufacturing" has the meaning given in s. 77.54 (6m).

2. “Sales and use tax under ch. 77 paid by the person" includes use taxes paid directly by the person and sales and use taxes paid by the person's supplier and passed on to the person whether separately stated on the invoice or included in the total price.

(b) The tax imposed under s. 71.02 shall be reduced by an amount equal to the sales and use tax under ch. 77 paid by the person in such taxable year on fuel and electricity consumed in manufacturing tangible personal property in this state. Shareholders in a tax-option corporation and partners may claim the credit under this subsection, based on eligible sales and use taxes paid by the partnership or tax-option corporation, in proportion to the ownership interest of each partner or shareholder. The partnership or tax-option corporation shall calculate the amount of the credit which may be claimed by each partner or shareholder and shall provide that information to the partner or shareholder.

(c) 1. The credit under par. (b), including any credits carried over, may be offset only against the amount of the tax imposed upon or measured by the business operations of the claimant in which the fuel and electricity are consumed. If the credit computed is not entirely offset against taxes otherwise due, the unused balance shall be carried forward and credited against taxes otherwise due for the following 15 taxable years to the extent not offset by 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.

2. For shareholders in a tax-option corporation, the credit may be offset only against the tax imposed on the shareholder's prorated share of the tax-option corporation's income.

3. For partners, the credit may be offset only against the tax imposed on the partner's distributive share of partnership income.

4. If a tax-option corporation becomes liable for tax, the corporation may offset the credit against the tax due, with any remaining credit passing through to the shareholders.

5. If a corporation that is not a tax-option corporation has a carry-over credit and becomes a tax-option corporation before the credit carried over is used, the unused portion of the credit may be used by the tax-option corporation's shareholders on a prorated basis.

6. If the shareholders of a tax-option corporation have carry-over credits and the corporation becomes a corporation other than a tax-option corporation after the effective date of this subdivision .... [revisor inserts date], and before the credits carried over are used, the unused portion of the credits may be used by the corporation that is not a tax-option corporation.

27,2262n Section 2262n. 71.07 (5) (a) 7. of the statutes is repealed.

27,2262nm Section 2262nm. 71.07 (5) (a) 15. of the statutes is amended to read:

71.07 (5) (a) 15. The amount claimed as a deduction for medical care insurance under section 213 of the internal revenue code Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b) 17. to 20. and the amount claimed as a deduction for a long-term care insurance policy under section 213 (d) (1) (D) of the Internal Revenue Code, as defined in section 7702B (b) of the Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b) 26.

27,2262np Section 2262np. 71.07 (5m) of the statutes is created to read:

71.07 (5m) Working families tax credit. (a) Definitions. In this subsection:

1. “Claimant" means an individual who is eligible to claim the credit under this subsection.

2. “Department" means the department of revenue.

3. “Household" means a claimant and an individual related to the claimant as husband or wife.

4. “Net tax liability" means a claimant's income tax liability after he or she completes the computations listed in s. 71.10 (4) (a) to (dr).

(b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, one of the following amounts:

1. If the claimant is single and his or her adjusted gross income is less than $9,000 in the year to which the claim relates, an amount equal to his or her net tax liability.

2. If the claimant is single and his or her adjusted gross income is at least $9,000 but less than $10,000 in the year to which the claim relates, an amount that is calculated as follows:

a. Calculate the value of a fraction, the denominator of which is $1,000 and the numerator of which is the difference between the claimant's adjusted gross income and $9,000.