Amendment JR1 ASA2-AB7

LRBs0018/1

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January 2011 Special Session

2011 - 2012 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 2, TO ASSEMBLY BILL 7

January 20, 2011 - Offered by Joint Committee on Finance.

AB7-ASA2,1,4 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a) 4., 71.34 (1k) (g), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (5p), 71.10 (4) (dw), 71.28 (5p), 71.30 (3) (dw), 71.47 (5p) and 71.49 (1) (dw) of the statutes; relating to: an income and franchise tax credit for small businesses.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB7-ASA2, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB7-ASA2,1,11 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) 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 (1k) (g).

AB7-ASA2, s. 2 Section 2. 71.07 (5p) of the statutes is created to read:

AB7-ASA2,2,2 71.07 (5p) Small business credit. (a) Definitions. In this subsection:

AB7-ASA2,2,3 1. "Claimant" means a person who files a claim under this subsection.

AB7-ASA2,2,12 2. "Increase in the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year" means the number determined by subtracting from the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year, as determined by computing the average employee count from the taxpayer's quarterly unemployment insurance reports for the taxable year, the number of full-time equivalent employees employed by the taxpayer in this state during the immediately preceding taxable year, as determined by computing the average employee count from the taxpayer's quarterly unemployment insurance reports for the immediately preceding taxable year.

AB7-ASA2,2,17 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2010, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of the tax, an amount equal to $250 multiplied by the increase in the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year.

AB7-ASA2,2,22 (c) Limitations. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection. A partnership, limited liability company, or tax-option corporation shall compute the rate of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them.

AB7-ASA2,3,2 (d) Administration. 1. A claimant shall claim the credit under this subsection on a form prepared by the department and shall submit to the department any documentation required by the department to administer the credit under this subsection.

AB7-ASA2,3,4 2. 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.

AB7-ASA2, s. 3 Section 3. 71.10 (4) (dw) of the statutes is created to read:

AB7-ASA2,3,6 71.10 (4) (dw) Small business credit under s. 71.07 (5p).

AB7-ASA2, s. 4 Section 4. 71.21 (4) of the statutes is amended to read:

AB7-ASA2,3,11 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and passed through to partners shall be added to the partnership's income.

AB7-ASA2, s. 5 Section 5. 71.26 (2) (a) 4. of the statutes is amended to read:

AB7-ASA2,3,18 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).

AB7-ASA2, s. 6 Section 6. 71.28 (5p) of the statutes is created to read:

AB7-ASA2,3,20 71.28 (5p) Small business credit. (a) Definitions. In this subsection:

AB7-ASA2,3,21 1. "Claimant" means a person who files a claim under this subsection.

AB7-ASA2,4,5 2. "Increase in the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year" means the number determined by subtracting from the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year, as determined by computing the average employee count from the taxpayer's quarterly unemployment insurance reports for the taxable year, the number of full-time equivalent employees employed by the taxpayer in this state during the immediately preceding taxable year, as determined by computing the average employee count from the taxpayer's quarterly unemployment insurance reports for the immediately preceding taxable year.

AB7-ASA2,4,10 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2010, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of the tax, an amount equal to $250 multiplied by the increase in the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year.

AB7-ASA2,4,15 (c) Limitations. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection. A partnership, limited liability company, or tax-option corporation shall compute the rate of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them.

AB7-ASA2,4,19 (d) Administration. 1. A claimant shall claim the credit under this subsection on a form prepared by the department and shall submit to the department any documentation required by the department to administer the credit under this subsection.

AB7-ASA2,4,21 2. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB7-ASA2, s. 7 Section 7. 71.30 (3) (dw) of the statutes is created to read:

AB7-ASA2,4,23 71.30 (3) (dw) Small business credit under s. 71.28 (5p).

AB7-ASA2, s. 8 Section 8. 71.34 (1k) (g) of the statutes is amended to read:

AB7-ASA2,5,4 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and passed through to shareholders.

AB7-ASA2, s. 9 Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:

AB7-ASA2,5,12 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).

AB7-ASA2, s. 10 Section 10. 71.47 (5p) of the statutes is created to read:

AB7-ASA2,5,14 71.47 (5p) Small business credit. (a) Definitions. In this subsection:

AB7-ASA2,5,15 1. "Claimant" means a person who files a claim under this subsection.

AB7-ASA2,5,24 2. " Increase in the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year" means the number determined by subtracting from the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year, as determined by computing the average employee count from the taxpayer's quarterly unemployment insurance reports for the taxable year, the number of full-time equivalent employees employed by the taxpayer in this state during the immediately preceding taxable year, as determined by computing the average employee count from the taxpayer's quarterly unemployment insurance reports for the immediately preceding taxable year.

AB7-ASA2,6,5 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2010, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of the tax, an amount equal to $250 multiplied by the increase in the number of full-time equivalent employees employed by the taxpayer in this state during the taxable year.

AB7-ASA2,6,10 (c) Limitations. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection. A partnership, limited liability company, or tax-option corporation shall compute the rate of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them.

AB7-ASA2,6,14 (d) Administration. 1. A claimant shall claim the credit under this subsection on a form prepared by the department and shall submit to the department any documentation required by the department to administer the credit under this subsection.

AB7-ASA2,6,16 2. 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.

AB7-ASA2, s. 11 Section 11. 71.49 (1) (dw) of the statutes is created to read:

AB7-ASA2,6,18 71.49 (1) (dw) Small business credit under s. 71.47 (5p).

AB7-ASA2, s. 12 Section 12. 77.92 (4) of the statutes is amended to read:

AB7-ASA2,7,10 77.92 (4) "Net business income," with respect to a partnership, means taxable income as calculated under section 703 of the Internal Revenue Code; plus the items of income and gain under section 702 of the Internal Revenue Code, including taxable state and municipal bond interest and excluding nontaxable interest income or dividend income from federal government obligations; minus the items of loss and deduction under section 702 of the Internal Revenue Code, except items that are not deductible under s. 71.21; plus guaranteed payments to partners under section 707 (c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r); and plus or minus, as appropriate, transitional adjustments, depreciation differences, and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain, loss, and deductions from farming. "Net business income," with respect to a natural person, estate, or trust, means profit from a trade or business for federal income tax purposes and includes net income derived as an employee as defined in section 3121 (d) (3) of the Internal Revenue Code.

AB7-ASA2, s. 13 Section 13. Nonstatutory provisions.

AB7-ASA2,7,13 (1) Required general fund balance. Section 20.003 (4) of the statutes does not apply to the action of the legislature in enacting this act.