AB81: Bill Text

LRB-1127/1

MES:cmh&kg:jf

1999 - 2000 LEGISLATURE

1999 Assembly BILL 81

February 2, 1999 - Introduced by Representatives Musser, Hasenohrl, Powers, Owens, Plale, Pettis, Freese, Turner, F. Lasee, Hahn, Gunderson, Albers, Goetsch, Porter and Kreibich, cosponsored by Senators Wirch, Breske, Clausing, Drzewiecki and Roessler. Referred to Committee on Veterans and Military Affairs.

AB81,1,5 An Act to amend 71.05 (6) (a) 15., 71.08 (1) (intro.), 71.10 (4) (i), 71.21 (4), 71.26 (2) (a), 71.30 (3) (f), 71.34 (1) (g), 71.45 (2) (a) 10., 71.49 (1) (f) and 77.92 (4); and to create 20.835 (2) (a), 71.07 (5dv), 71.28 (5dv) and 71.47 (5dv) of the statutes; relating to: creating an income tax credit and franchise tax credit for hiring disabled veterans and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill creates an income tax and franchise tax credit for businesses that hire disabled veterans. Sole proprietorships, corporations and insurers may claim the credit. Partnerships, limited liability companies and tax-option corporations compute the credit but pass it on to the partners, members and shareholders in proportion to their ownership interests. The credit, in respect to each disabled veteran who is hired after the bill becomes law, is the veteran's percentage of disability multiplied by the wages or salary paid to the veteran. The credit is refundable (a check will be issued by the state if the credit exceeds the business' tax liability). The credit is added to the taxpayer's income so that the taxpayer does not get both a business expense deduction and a credit for the wages and salaries 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:

AB81, s. 1 Section 1. 20.835 (2) (a) of the statutes is created to read:

AB81,2,3 20.835 (2) (a) Disabled veterans hiring credit. A sum sufficient to make the payments under ss. 71.07 (5dv) (c), 71.28 (5dv) (c) and 71.47 (5dv) (c).

AB81, s. 2 Section 2. 71.05 (6) (a) 15. of the statutes is amended to read:

AB81,2,9 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx) and, (3s) and (5dv) 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).

AB81, s. 3 Section 3. 71.07 (5dv) of the statutes is created to read:

AB81,2,11 71.07 (5dv) Disabled veterans hiring credit. (a) In this subsection:

AB81,2,12 1. "Claimant" means a person who files a claim under this subsection.

AB81,2,14 2. "Disabled veteran" means a person who is eligible for compensation under 38 USC 310.

AB81,2,16 3. "Percentage of disability" means the percentage determined under 38 USC 314 (a) to (j).

AB81,2,18 (b) Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02 an amount calculated as follows:

AB81,2,20 1. For each disabled veteran whom the claimant hires after the effective date of this subdivision .... [revisor inserts date], determine the wages and salary paid.

AB81,3,2 2. Multiply the amount under subd. 1. by the disabled veteran's percentage of disability.

AB81,3,3 3. Add the amounts under subd. 2. for all disabled veterans.

AB81,3,8 (c) If the allowable amount of the claim under this subsection exceeds the income taxes otherwise due on the claimant's income, the amount of the claim that is not used to offset those taxes shall be certified by the department of revenue to the department of administration for payment by check, share draft or other draft drawn from the appropriation under s. 20.835 (2) (a).

AB81,3,16 (d) Partnerships, limited liability companies and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit is based on their payment of wages and salaries. A partnership, limited liability company or corporation shall compute the amount of credit that each of its partners, members or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB81,3,18 (e) Section 71.28 (4) (g) and (h) as it relates to the credit under s. 71.28 (4) relates to the credit under this subsection.

AB81, s. 4 Section 4. 71.08 (1) (intro.) of the statutes is amended to read:

AB81,4,3 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), (2dx), (2fd), (3m), (3s), (5dv), (6) and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m) and, (3) and (5dv) and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m) and, (3) and (5dv) 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:

AB81, s. 5 Section 5. 71.10 (4) (i) of the statutes is amended to read:

AB81,4,10 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), earned income tax credit under s. 71.07 (9e), disabled veterans hiring credit under s. 71.07 (5dv), estimated tax payments under s. 71.09, and taxes withheld under subch. X.

AB81, s. 6 Section 6. 71.21 (4) of the statutes is amended to read:

AB81,4,14 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2ds), (2dx) and, (3s) and (5dv) and passed through to partners shall be added to the partnership's income.

AB81, s. 7 Section 7. 71.26 (2) (a) of the statutes is amended to read:

AB81,5,5 71.26 (2) (a) Corporations in general. The "net income" of a corporation means the gross income as computed under the internal revenue code as modified under sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit computed under s. 71.28 (1) and (3) to (5) plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds) and , (1dx) and (5dv) 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 (1) (g) plus the amount of losses from the sale or other disposition of assets the gain from which would be wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and minus deductions, as computed under the internal revenue code as modified under sub. (3), plus or minus, as appropriate, an amount equal to the difference between the federal basis and Wisconsin basis of any asset sold, exchanged, abandoned or otherwise disposed of in a taxable transaction during the taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).

AB81, s. 8 Section 8. 71.28 (5dv) of the statutes is created to read:

AB81,5,7 71.28 (5dv) Disabled veterans hiring credit. (a) In this subsection:

AB81,5,8 1. "Claimant" means a person who files a claim under this subsection.

AB81,5,10 2. "Disabled veteran" means a person who is eligible for compensation under 38 USC 310.

AB81,5,12 3. "Percentage of disability" means the percentage determined under 38 USC 314 (a) to (j).

AB81,5,14 (b) Subject to the limitations provided in this subsection, a claimant may claim as a credit against the taxes imposed under s. 71.23 an amount calculated as follows:

AB81,5,16 1. For each disabled veteran whom the claimant hires after the effective date of this subdivision .... [revisor inserts date], determine the wages and salary paid.

AB81,5,18 2. Multiply the amount under subd. 1. by the disabled veteran's percentage of disability.

AB81,5,19 3. Add the amounts under subd. 2. for all disabled veterans.

AB81,5,24 (c) If the allowable amount of the claim under this subsection exceeds the amount of taxes otherwise due under this subchapter, the allowable amount of the claim that is not used to offset taxes shall be certified by the department of revenue to the department of administration for payment by check, share draft or other draft drawn from the appropriation under s. 20.835 (2) (a).

AB81,6,8 (d) Partnerships, limited liability companies and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit is based on their payment of wages and salaries. A partnership, limited liability company or corporation shall compute the amount of credit that each of its partners, members or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB81,6,10 (e) Subsection (4) (g) and (h) as it relates to the credit under sub. (4) relates to the credit under this subsection.

AB81, s. 9 Section 9. 71.30 (3) (f) of the statutes is amended to read:

AB81,6,15 71.30 (3) (f) The total of farmers' drought property tax credit under s. 71.28 (1fd), farmland preservation credit under subch. IX, farmland tax relief credit under s. 71.28 (2m), disabled veterans hiring credit under s. 71.28 (5dv) and estimated tax payments under s. 71.29.

AB81, s. 10 Section 10. 71.34 (1) (g) of the statutes is amended to read: