SB164: Bill Text

The credit is nonrefundable so, if the amount of a credit for which a taxpayer is eligible exceeds the person's tax liability, no check is refunded to the claimant in the amount by which the credit due exceeds the taxpayer's tax liability. No claims may be filed for the credit once the department of revenue (DOR) determines that the total amount of revenues received by the endowment fund equals $50,150,000. In addition, DOR is required to deny a portion of a credit claimed if the total amount of claims exceeds $7,000,000 in a taxable year that begins after December 31, 2003.

The bill exempts from the sales tax, after December 31, 2001, sales of admissions or tickets to an artistic event sponsored by a nonprofit organization. The bill also requires DOR to include on its tax forms on which the credit may be claimed a statement that a taxpayer may contribute amounts to the artistic endowment fund that exceed the amount for which a credit may be claimed by reducing the taxpayer's refund or by increasing the taxpayer's payment for a tax liability.

This bill will be referred to the joint survey committee on tax exemptions for a detailed analysis, which will be printed as an appendix to this bill.

For further information see the state and local 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:

Prefatory note: This bill, recommended by the joint legislative council's special committee on arts funding, creates an artistic endowment foundation and fund. The foundation will have a 14-member board of directors, 8 of whom are appointed by the governor. The other members are the chairperson of the Wisconsin arts board or the chairperson's designee, the executive secretary of the Wisconsin arts board as a nonvoting member, and 4 legislators representing the majority and minority parties of each house of the legislature. The members appointed by the governor will serve staggered 7-year terms.

The foundation will be financed by revenues from contributions. The bill establishes a tax credit for contributions to the foundation. The individual tax credit is $50 per taxable year (or $100 per year for a married couple filing a joint return) and the corporate tax credit is $500 per taxable year. The tax credits first apply to taxable years beginning after December 31, 2002. The revenues from contributions will be placed in an endowment fund, to be invested by the state of Wisconsin investment board. The tax credits will expire at the end of the calendar year in which total contributions to the artistic endowment fund total $50,150,000.

The earnings on the revenues placed in the endowment fund will be used to provide funding to the Wisconsin arts board for programs that provide operating support to arts organizations and regranting programs of the board. At least 50% of unrestricted earnings, if distributed by the endowment fund, must be used for this purpose.

Also, up to 50% of the unrestricted earnings will be distributed to programs established and reviewed biennially by the foundation with the advice of the Wisconsin arts board and statewide arts organizations. These programs are required, to the extent possible, to use the arts board mechanisms and staff for administering and distributing funds. The bill also provides that the foundation may not distribute funds to the arts board in any fiscal year in which the foundation determines that the amount of general purpose revenues (GPR) appropriated to the arts board programs by the legislature is less than the amount appropriated for those programs in the previous fiscal year. This is a "maintenance of effort" provision to ensure that the earnings of the endowment fund are not used to replace state appropriations to the arts board.

The bill provides $7,500 per year in GPR for start-up costs for the artistic endowment board. It also provides $150,000 GPR for the biennium for public education and marketing relating to the fund which will be repaid by taking 50% of the first $300,000 in contributions to the fund.

The bill directs the department of revenue to include on the forms on which the artistic endowment tax credits are claimed that a taxpayer may contribute amounts to the Wisconsin artistic endowment fund that exceed the amount for which a credit may be claimed by reducing the taxpayer's refund or increasing his or her payment for tax liability with proceeds deposited in the fund.

The bill also establishes a sales tax exemption for sales of tickets and admissions to artistic events sponsored by nonprofit organizations. The tax exemption will take effect on January 1, 2002.

SB164, s. 1 Section 1. 20.005 (3) (schedule) of the statutes: at the appropriate places, insert the following amounts for the purposes indicated: - See PDF for table

SB164, s. 2 Section 2. 20.215 (1) (j) of the statutes is created to read:

SB164,4,5 20.215 (1) (j) Support of arts programs. All moneys received from the Wisconsin Artistic Endowment Foundation under s. 247.06 (1) (a) for operating support of arts organizations and for grants under the Wisconsin regranting program under s. 44.62.

SB164, s. 3 Section 3. 20.220 of the statutes is created to read:

SB164,4,9 20.220 Wisconsin Artistic Endowment Foundation. There is appropriated to the Wisconsin Artistic Endowment Foundation for the following programs:

SB164,4,13 (1) Support of the arts. (a) Wisconsin artistic endowment board; start-up costs. The amounts in the schedule for the start-up costs of the Wisconsin artistic endowment board. No moneys may be encumbered from this appropriation after June 30, 2003.

SB164,4,16 (b) Education and marketing. As a continuing appropriation, the amounts in the schedule for public education and marketing relating to the Wisconsin artistic endowment fund.

SB164,5,2 (q) General program operations. From the artistic endowment fund, the amounts in the schedule for general program operations of the foundation.

SB164,5,6 (r) Support of the arts. From the artistic endowment fund, as a continuing appropriation, all moneys received as interest and earnings of the artistic endowment fund, less the amounts appropriated in par. (q), for support of the arts under s. 247.06.

SB164, s. 4 Section 4. 25.14 (1) (a) 15. of the statutes is created to read:

SB164,5,8 25.14 (1) (a) 15. The artistic endowment fund.

SB164, s. 5 Section 5. 25.17 (1) (ak) of the statutes is created to read:

SB164,5,10 25.17 (1) (ak) Artistic endowment fund (s. 25.77);

SB164, s. 6 Section 6. 25.77 of the statutes is created to read:

SB164,5,14 25.77 Artistic endowment fund. (1) There is established a separate nonlapsible trust fund designated as the artistic endowment fund, to consist of all of the following:

SB164,5,16 (a) All gifts, grants, bequests, or other contributions made to the artistic endowment fund.

SB164,5,18 (b) All gifts, grants, bequests, or other contributions made to the Wisconsin Artistic Endowment Foundation and described under s. 247.05 (2) (f).

SB164,5,21 (2) Notwithstanding sub. (1), only 50% of the first $300,000 of any gifts, grants, bequests, or other contributions received under sub. (1) shall be deposited in the artistic endowment fund.

SB164, s. 7 Section 7. 44.62 (2) of the statutes is amended to read:

SB164,5,25 44.62 (2) Subject to sub. (3), the board shall award grants under the Wisconsin regranting program to local arts agencies and municipalities. Grants shall be awarded from the appropriation appropriations under s. 20.215 (1) (f) and (j).

SB164, s. 8 Section 8. 71.07 (5) (a) 10. of the statutes is created to read:

SB164,6,2 71.07 (5) (a) 10. Any amount claimed as a credit under sub. (9t).

SB164, s. 9 Section 9. 71.07 (9t) of the statutes is created to read:

SB164,6,5 71.07 (9t) Artistic endowment credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB164,6,15 (b) Filing claims. For taxable years beginning after December 31, 2002, subject to the limitations provided in this subsection and s. 73.03 (35m), a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, an amount equal to the amount contributed to the artistic endowment fund under s. 25.77, not to exceed $50 in a taxable year for a claimant who claims the credit as an individual or claims the credit as a married person who files a separate income tax return, not to exceed $100 in a taxable year for a claimant and a claimant's spouse who file a joint return, and not to exceed $500 in a taxable year for a claimant who claims the credit as a sole proprietor, a partner, a member of a limited liability company, or a shareholder in a tax-option corporation.

SB164,6,17 (c) Limitations and conditions. 1. Nonresidents of this state are not eligible for the credit under this subsection.

SB164,7,2 2. For a claimant who is a part-year resident of this state and who is a single person or a married person filing a separate return, multiply the credit for which the claimant is eligible under par. (b) by a fraction, the numerator of which is the individual's Wisconsin adjusted gross income and the denominator of which is the individual's federal adjusted gross income. If a claimant is married and files a joint return, and if the claimant or the claimant's spouse, or both, are nonresidents or part-year residents of this state, multiply the credit for which the claimant is eligible under par. (b) by a fraction, the numerator of which is the couple's joint Wisconsin adjusted gross income and the denominator of which is the couple's joint federal adjusted gross income.

SB164,7,5 3. No new claim may be filed under this subsection for a taxable year that begins after December 31 of the year in which the department determines that the total amount of revenues received by the endowment fund equals $50,150,000.

SB164,7,7 4. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

SB164,7,15 5. 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 are based on their economic activity. A partnership, limited liability company, or tax-option 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.

SB164,7,17 (d) Administration. Section 71.28 (4) (e) and (g), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB164, s. 10 Section 10. 71.10 (4) (dg) of the statutes is created to read:

SB164,7,19 71.10 (4) (dg) The artistic endowment credit under s. 71.07 (9t).

SB164, s. 11 Section 11. 71.21 (4) of the statutes is amended to read:

SB164,7,23 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2ds), (2dx) and, (3s) , and (9t) and passed through to partners shall be added to the partnership's income.

SB164, s. 12 Section 12. 71.26 (1) (bo) of the statutes is created to read:

SB164,8,2 71.26 (1) (bo) Wisconsin Artistic Endowment Foundation. Income of the Wisconsin Artistic Endowment Foundation under ch. 247.

SB164, s. 13 Section 13. 71.26 (2) (a) of the statutes is amended to read:

SB164,8,18 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), and (9t) plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds) and (1dx) 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).

SB164, s. 14 Section 14. 71.28 (9t) of the statutes is created to read:

SB164,8,21 71.28 (9t) Artistic endowment credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB164,9,2 (b) Filing claims. For taxable years beginning after December 31, 2002, subject to the limitations provided in this subsection and s. 73.03 (35m), a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, an amount equal to the amount contributed to the artistic endowment fund under s. 25.77, not to exceed $500 in a taxable year.

SB164,9,6 (c) Limitations and conditions. 1. No new claim may be filed under this subsection for a taxable year that begins after December 31 of the year in which the department determines that the total amount of revenues received by the endowment fund equals $50,150,000.

SB164,9,14 2. 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 are based on their economic activity. A partnership, limited liability company, or tax-option 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.

SB164,9,16 3. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

SB164,9,18 (d) Administration. Subsection (4) (e) and (g), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB164, s. 15 Section 15. 71.30 (3) (bm) of the statutes is created to read:

SB164,9,20 71.30 (3) (bm) Artistic endowment credit under s. 71.28 (9t).

SB164, s. 16 Section 16. 71.34 (1) (g) of the statutes is amended to read:

SB164,9,24 71.34 (1) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx) and, (3), and (9t) and passed through to shareholders.

SB164, s. 17 Section 17. 71.47 (9t) of the statutes is created to read:

SB164,10,2 71.47 (9t) Artistic endowment credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB164,10,7 (b) Filing claims. For taxable years beginning after December 31, 2002, subject to the limitations provided in this subsection and s. 73.03 (35m), a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, an amount equal to the amount contributed to the artistic endowment fund under s. 25.77, not to exceed $500 in a taxable year.

SB164,10,11 (c) Limitations and conditions. 1. No new claim may be filed under this subsection for a taxable year that begins after December 31 of the year in which the department determines that the total amount of revenues received by the endowment fund equals $50,150,000.

SB164,10,19 2. 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 are based on their economic activity. A partnership, limited liability company, or tax-option 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.

SB164,10,21 3. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

SB164,10,23 (d) Administration. Section 71.28 (4) (e) and (g), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB164, s. 18 Section 18. 71.49 (1) (bm) of the statutes is created to read:

SB164,10,25 71.49 (1) (bm) Artistic endowment credit under s. 71.47 (9t).

SB164, s. 19 Section 19. 73.03 (35m) of the statutes is created to read:

SB164,11,5 73.03 (35m) For taxable years beginning after December 31, 2003, to deny a portion of a credit claimed under s. 71.07 (9t), 71.28 (9t), or 71.47 (9t) if granting the full amount of the credit would result in the total credits claimed by all claimants under ss. 71.07 (9t), 71.28 (9t), and 71.47 (9t) exceeding $7,000,000 in a taxable year.

SB164, s. 20 Section 20. 73.03 (56) of the statutes is created to read:

SB164,11,12 73.03 (56) To include on the forms on which the artistic endowment credits are claimed, under ss. 71.07 (9t), 71.28 (9t), and 71.47 (9t), a statement that a taxpayer may contribute amounts to the artistic endowment fund under s. 25.77 that exceed the amount for which a credit may be claimed by reducing the taxpayer's refund or by increasing the taxpayer's payment for tax liability, with the proceeds to be deposited into the fund.

SB164, s. 21 Section 21. 77.54 (7r) of the statutes is created to read:

SB164,11,17 77.54 (7r) Sales of admissions or tickets after December 31, 2001, to an artistic event sponsored by an association or organization that is described in section 501 (c) (3) of the Internal Revenue Code and is exempt from taxation under section 501 (1) of the Internal Revenue Code.

SB164, s. 22 Section 22. 77.92 (4) of the statutes is amended to read:

SB164,12,8 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), (2dr), (2ds), (2dx) and, (3s), and (9t); 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.

SB164, s. 23 Section 23. Chapter 247 of the statutes is created to read:

SB164,12,12 chapter 247 Wisconsin Artistic Endowment Foundation

SB164,12,14 247.02 Definition. In this chapter, "foundation" means the Wisconsin Artistic Endowment Foundation.

SB164,12,19 247.03 Creation and organization. (1) There is created a public body corporate and politic, to be known as the "Wisconsin Artistic Endowment Foundation." The foundation shall be a nonprofit corporation organized under ch. 181 so that contributions to it are deductible from adjusted gross income under section 170 of the Internal Revenue Code.

SB164,12,21 (2) The board of directors of the foundation shall consist of the following persons:

SB164,13,2 (a) Eight nominees of the governor, who are residents of this state, represent the diverse artistic interests of the people of this state, and represent each of the geographic regions of the state, appointed for 7-year terms with the advice and consent of the senate. At least one of the nominees shall be knowledgeable in marketing and fund raising. Each member appointed under this paragraph may hold office until a successor is appointed.

SB164,13,3 (b) The chairperson of the arts board or the chairperson's designee.

SB164,13,4 (c) The executive secretary of the arts board as a nonvoting member.

SB164,13,6 (d) Two representatives to the assembly, one appointed by the speaker of the assembly and one appointed by the minority leader of the assembly.