Analysis by the Legislative Reference Bureau
This bill creates an income and franchise tax credit for work provided by a
community rehabilitation program to a business. The amount of the credit equals
5 percent of the amount the taxpayer paid in the taxable year to a community
rehabilitation program to perform work for the taxpayer's business, pursuant to a
contract. The maximum amount that a taxpayer may claim in a taxable year is
$25,000 for each community rehabilitation program for which the taxpayer enters
into a contract to perform work. If the credit claimed by a taxpayer exceeds the
taxpayer's tax liability, the state will not issue a refund check, but the taxpayer may
carry forward any remaining credit to subsequent taxable years.
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:
AB622, s. 1
1Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:
AB622,2,62 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
3(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), (5b), and (5d)
4and not passed through by a partnership, limited liability company, or tax-option
5corporation that has added that amount to the partnership's, company's, or
6tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).
AB622, s. 2 7Section 2. 71.07 (3w) of the statutes is created to read:
AB622,2,98 71.07 (3w) Community rehabilitation program credit. (a) Definitions. In this
9subsection:
AB622,2,1010 1. "Claimant" means a person who files a claim under this subsection.
AB622,2,1411 2. "Community rehabilitation program" means a nonprofit entity, county,
12municipality, or federal agency that directly provides, or facilitates the provision of,
13vocational rehabilitation services to individuals who have disabilities to maximize
14the employment opportunities, including career advancement, of such individuals.
AB622,2,1615 3. "Vocational rehabilitation services" include education, training,
16employment, counseling, therapy, placement, and case management.
AB622,2,1917 4. "Work" includes production, packaging, assembly, food service, custodial
18service, clerical service, and other commercial activities that improve employment
19opportunities for individuals who have disabilities.
AB622,2,2420 (b) Filing claims. Subject to the limitations provided in this subsection, a
21claimant may claim as a credit against the tax imposed under ss. 71.02 and 71.08,
22up to the amount of those taxes, an amount equal to 5 percent of the amount the
23claimant paid in the taxable year to a community rehabilitation program to perform
24work for the claimant's business, pursuant to a contract.
AB622,3,4
1(c) Limitations. 1. The maximum amount that any claimant may claim under
2this subsection in a taxable year is $25,000 for each community rehabilitation
3program for which the claimant enters into a contract to have the community
4rehabilitation program perform work for the claimant's business.
AB622,3,95 2. No credit may be claimed under this subsection unless the claimant submits
6with the claimant's return a form, as prescribed by the department of revenue, that
7verifies that the claimant has entered into a contract with a community
8rehabilitation program and that the program has received payment from the
9claimant for work provided by the program, consistent with par. (b).
AB622,3,1710 3. Partnerships, limited liability companies, and tax-option corporations may
11not claim the credit under this subsection, but the eligibility for, and the amount of,
12the credit are based on their payment of amounts under par. (b). A partnership,
13limited liability company, or tax-option corporation shall compute the amount of
14credit that each of its partners, members, or shareholders may claim and shall
15provide that information to each of them. Partners, members of limited liability
16companies, and shareholders of tax-option corporations may claim the credit in
17proportion to their ownership interests.
AB622,3,1918 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
19s. 71.28 (4), applies to the credit under this subsection.
AB622, s. 3 20Section 3. 71.08 (1) (intro.) of the statutes is amended to read:
AB622,4,421 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
22couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
23ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2fd), (3m), (3n), (3s),
24(3t), (3w), (5b), (5d), (6), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx),
25(1fd), (2m), (3), (3n), and (3t), and (3w), and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds),

1(1dx), (1fd), (2m), (3), (3n), and (3t), and (3w), and subchs. VIII and IX and payments
2to other states under s. 71.07 (7), is less than the tax under this section, there is
3imposed on that natural person, married couple filing jointly, trust, or estate, instead
4of the tax under s. 71.02, an alternative minimum tax computed as follows:
AB622, s. 4 5Section 4. 71.10 (4) (gbn) of the statutes is created to read:
AB622,4,66 71.10 (4) (gbn) Community rehabilitation program credit under s. 71.07 (3w).
AB622, s. 5 7Section 5. 71.21 (4) of the statutes is amended to read:
AB622,4,108 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
9(2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), and (5b) and passed through
10to partners shall be added to the partnership's income.
AB622, s. 6 11Section 6. 71.26 (2) (a) of the statutes is amended to read:
AB622,5,412 71.26 (2) (a) Corporations in general. The "net income" of a corporation means
13the gross income as computed under the Internal Revenue Code as modified under
14sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
15computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c)
167., the amount of the credit under s. 71.28 (3) that the taxpayer added to income
17under this paragraph at the time that the taxpayer first claimed the credit plus the
18amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm),
19(1ds), (1dx), (3g), (3n), (3t), (3w), and (5b) and not passed through by a partnership,
20limited liability company, or tax-option corporation that has added that amount to
21the partnership's, limited liability company's, or tax-option corporation's income
22under s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from the sale or other
23disposition of assets the gain from which would be wholly exempt income, as defined
24in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and minus
25deductions, as computed under the Internal Revenue Code as modified under sub.

1(3), plus or minus, as appropriate, an amount equal to the difference between the
2federal basis and Wisconsin basis of any asset sold, exchanged, abandoned, or
3otherwise disposed of in a taxable transaction during the taxable year, except as
4provided in par. (b) and s. 71.45 (2) and (5).
AB622, s. 7 5Section 7. 71.28 (3w) of the statutes is created to read:
AB622,5,76 71.28 (3w) Community rehabilitation program credit. (a) Definitions. In this
7subsection:
AB622,5,88 1. "Claimant" means a person who files a claim under this subsection.
AB622,5,129 2. "Community rehabilitation program" means a nonprofit entity, county,
10municipality, or federal agency that directly provides, or facilitates the provision of,
11vocational rehabilitation services to individuals who have disabilities to maximize
12the employment opportunities, including career advancement, of such individuals.
AB622,5,1413 3. "Vocational rehabilitation services" include education, training,
14employment, counseling, therapy, placement, and case management.
AB622,5,1715 4. "Work" includes production, packaging, assembly, food service, custodial
16service, clerical service, and other commercial activities that improve employment
17opportunities for individuals who have disabilities.
AB622,5,2218 (b) Filing claims. Subject to the limitations provided in this subsection, a
19claimant may claim as a credit against the tax imposed under s. 71.23, up to the
20amount of those taxes, an amount equal to 5 percent of the amount the claimant paid
21in the taxable year to a community rehabilitation program to perform work for the
22claimant's business, pursuant to a contract.
AB622,6,223 (c) Limitations. 1. The maximum amount that any claimant may claim under
24this subsection in a taxable year is $25,000 for each community rehabilitation

1program for which the claimant enters into a contract to have the community
2rehabilitation program perform work for the claimant's business.
AB622,6,73 2. No credit may be claimed under this subsection unless the claimant submits
4with the claimant's return a form, as prescribed by the department of revenue, that
5verifies that the claimant has entered into a contract with a community
6rehabilitation program and that the program has received payment from the
7claimant for work provided by the program, consistent with par. (b).
AB622,6,158 3. Partnerships, limited liability companies, and tax-option corporations may
9not claim the credit under this subsection, but the eligibility for, and the amount of,
10the credit are based on their payment of amounts under par. (b). A partnership,
11limited liability company, or tax-option corporation shall compute the amount of
12credit that each of its partners, members, or shareholders may claim and shall
13provide that information to each of them. Partners, members of limited liability
14companies, and shareholders of tax-option corporations may claim the credit in
15proportion to their ownership interests.
AB622,6,1716 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
17sub. (4), applies to the credit under this subsection.
AB622, s. 8 18Section 8. 71.30 (3) (bn) of the statutes is created to read:
AB622,6,1919 71.30 (3) (bn) Community rehabilitation program credit under s. 71.28 (3w).
AB622, s. 9 20Section 9. 71.34 (1) (g) of the statutes is amended to read:
AB622,6,2321 71.34 (1) (g) An addition shall be made for credits computed by a tax-option
22corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), (3g),
23(3n), (3t), (3w), and (5b) and passed through to shareholders.
AB622, s. 10 24Section 10. 71.45 (2) (a) 10. of the statutes is amended to read:
AB622,7,6
171.45 (2) (a) 10. By adding to federal taxable income the amount of credit
2computed under s. 71.47 (1dd) to (1dx), (3n), (3w), and (5b) and not passed through
3by a partnership, limited liability company, or tax-option corporation that has added
4that amount to the partnership's, limited liability company's, or tax-option
5corporation's income under s. 71.21 (4) or 71.34 (1) (g) and the amount of credit
6computed under s. 71.47 (1), (3), (3t), (4), and (5).
AB622, s. 11 7Section 11. 71.47 (3w) of the statutes is created to read:
AB622,7,98 71.47 (3w) Community rehabilitation program credit. (a) Definitions. In this
9subsection:
AB622,7,1010 1. "Claimant" means a person who files a claim under this subsection.
AB622,7,1411 2. "Community rehabilitation program" means a nonprofit entity, county,
12municipality, or federal agency that directly provides, or facilitates the provision of,
13vocational rehabilitation services to individuals who have disabilities to maximize
14the employment opportunities, including career advancement, of such individuals.
AB622,7,1615 3. "Vocational rehabilitation services" include education, training,
16employment, counseling, therapy, placement, and case management.
AB622,7,1917 4. "Work" includes production, packaging, assembly, food service, custodial
18service, clerical service, and other commercial activities that improve employment
19opportunities for individuals who have disabilities.
AB622,7,2420 (b) Filing claims. Subject to the limitations provided in this subsection, a
21claimant may claim as a credit against the tax imposed under s. 71.43, up to the
22amount of those taxes, an amount equal to 5 percent of the amount the claimant paid
23in the taxable year to a community rehabilitation program to perform work for the
24claimant's business, pursuant to a contract.
AB622,8,4
1(c) Limitations. 1. The maximum amount that any claimant may claim under
2this subsection in a taxable year is $25,000 for each community rehabilitation
3program for which the claimant enters into a contract to have the community
4rehabilitation program perform work for the claimant's business.
AB622,8,95 2. No credit may be claimed under this subsection unless the claimant submits
6with the claimant's return a form, as prescribed by the department of revenue, that
7verifies that the claimant has entered into a contract with a community
8rehabilitation program and that the program has received payment from the
9claimant for work provided by the program, consistent with par. (b).
AB622,8,1710 3. Partnerships, limited liability companies, and tax-option corporations may
11not claim the credit under this subsection, but the eligibility for, and the amount of,
12the credit are based on their payment of amounts under par. (b). A partnership,
13limited liability company, or tax-option corporation shall compute the amount of
14credit that each of its partners, members, or shareholders may claim and shall
15provide that information to each of them. Partners, members of limited liability
16companies, and shareholders of tax-option corporations may claim the credit in
17proportion to their ownership interests.
AB622,8,1918 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
19s. 71.28 (4), applies to the credit under this subsection.
AB622, s. 12 20Section 12. 71.49 (1) (bn) of the statutes is created to read:
AB622,8,2121 71.49 (1) (bn) Community rehabilitation program credit under s. 71.47 (3w).
AB622, s. 13 22Section 13. 77.92 (4) of the statutes is amended to read:
AB622,9,1223 77.92 (4) "Net business income," with respect to a partnership, means taxable
24income as calculated under section 703 of the Internal Revenue Code; plus the items
25of income and gain under section 702 of the Internal Revenue Code, including taxable

1state and municipal bond interest and excluding nontaxable interest income or
2dividend income from federal government obligations; minus the items of loss and
3deduction under section 702 of the Internal Revenue Code, except items that are not
4deductible under s. 71.21; plus guaranteed payments to partners under section 707
5(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
6(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3s), (3n), (3t), (3w), and (5b); and
7plus or minus, as appropriate, transitional adjustments, depreciation differences,
8and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding
9income, gain, loss, and deductions from farming. "Net business income," with respect
10to a natural person, estate, or trust, means profit from a trade or business for federal
11income tax purposes and includes net income derived as an employee as defined in
12section 3121 (d) (3) of the Internal Revenue Code.
AB622, s. 14 13Section 14. Initial applicability.
AB622,9,1714 (1) This act first applies to taxable years beginning on January 1 of the year
15in which this subsection takes effect, except that if this subsection takes effect after
16July 31 this act first applies to taxable years beginning on January 1 of the year
17following the year in which this subsection takes effect.
AB622,9,1818 (End)
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