AB824: Bill Text

LRB-3979/1

JK:jld:jf

2003 - 2004 LEGISLATURE

2003 Assembly BILL 824

February 9, 2004 - Introduced by Representative Schneider. Referred to Committee on Ways and Means.

AB824,1,4 An Act to renumber and amend 71.26 (2) (a); and to create 71.05 (6) (a) 21., 71.26 (2) (a) 6., 71.34 (1) (j) and 71.45 (2) (a) 16. of the statutes; relating to: the tax-exempt status of charitable organizations that do not contribute to veterans groups.

Analysis by the Legislative Reference Bureau

Under current law, a nonprofit charitable organization that is exempt from federal income taxes is also exempt from state income and franchise taxes. Under this bill, the income of a nonprofit charitable organization is subject to state income and franchise taxes, if the organization does not contribute at least 1 percent of its income in the taxable year to veterans groups.

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:

AB824, s. 1 Section 1. 71.05 (6) (a) 21. of the statutes is created to read:

AB824,2,3 71.05 (6) (a) 21. The gross income of an entity organized under section 501 (c) (3) of the Internal Revenue Code, if the entity does not contribute at least 1 percent of its income in the taxable year to veterans groups.

AB824, s. 2 Section 2. 71.26 (2) (a) of the statutes, as affected by 2003 Wisconsin Act 99, is renumbered 71.26 (2) (a) (intro.) and amended to read:

AB824,2,8 71.26 (2) (a) Corporations in general. (intro.) The "net income" of a corporation means the gross income as computed under the Internal Revenue Code as modified under sub. (3) minus and modified as follows:

AB824,2,9 1. Minus the amount of recapture under s. 71.28 (1di) plus.

AB824,2,13 2. Plus the amount of credit computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c) 7., the amount of the credit under s. 71.28 (3) that the taxpayer added to income under this paragraph at the time that the taxpayer first claimed the credit plus.

AB824,2,18 3. Plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3g), and (3t) 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.

AB824,2,22 4. 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.

AB824,3,2 5. 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).

AB824, s. 3 Section 3. 71.26 (2) (a) 6. of the statutes is created to read:

AB824,3,6 71.26 (2) (a) 6. Plus the gross income of an entity organized under section 501 (c) (3) of the Internal Revenue Code, if the entity does not contribute at least 1 percent of its income in the taxable year to veterans groups.

AB824, s. 4 Section 4. 71.34 (1) (j) of the statutes is created to read:

AB824,3,10 71.34 (1) (j) An addition shall be made for the gross income of an entity organized under section 501 (c) (3) of the Internal Revenue Code, if the entity does not contribute at least 1 percent of its income in the taxable year to veterans groups.

AB824, s. 5 Section 5. 71.45 (2) (a) 16. of the statutes is created to read:

AB824,3,15 71.45 (2) (a) 16. By adding to federal taxable income the gross income of an entity organized under section 501 (c) (3) of the Internal Revenue Code, if the entity does not contribute at least 1 percent of its income in the taxable year to veterans groups.

AB824, s. 6 Section 6. Initial applicability.

AB824,3,20 (1) This act first applies to taxable years beginning on January 1 of the year in which this subsection takes effect, except that if this subsection takes effect after July 31 this act first applies to taxable years beginning on January 1 of the year following the year in which this subsection takes effect.

AB824,3,21 (End)