AB767: Bill Text

LRB-3470/2

JK:kjf&wlj:pg

2005 - 2006 LEGISLATURE

2005 Assembly BILL 767

October 17, 2005 - Introduced by Representatives Wieckert, Gard, Berceau, Parisi, Kerkman, Hahn, Turner, Vos, Cullen, Boyle, Albers, Krawczyk, Gunderson, Ballweg, Musser, Gundrum, Wood, Freese, Davis and Hines, cosponsored by Senator Hansen. Referred to Committee on Energy and Utilities.

AB767,1,5 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (3w), 71.10 (4) (cp), 71.28 (3w), 71.30 (3) (dm), 71.47 (3w) and 71.49 (1) (dm) of the statutes; relating to: an income and franchise tax credit for using alternative energy sources to generate electricity and heat water.

Analysis by the Legislative Reference Bureau

This bill creates an income and franchise tax credit for alternative energy sources. A taxpayer may a claim a credit in an amount equal to the amount of sales and use taxes the taxpayer paid in the taxable year on certain equipment and services related to generating electricity and heating water by using solar energy, wind energy, or gas from agricultural waste. In addition, a taxpayer may claim a credit in an amount equal to 10 cents per kilowatt hour for energy generated from wind, the sun, or gas from agricultural waste that is used exclusively by the taxpayer or returned to a utility as surplus energy.

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:

AB767, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB767,2,6 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), (5b), and (5d) 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).

AB767, s. 2 Section 2. 71.07 (3w) of the statutes is created to read:

AB767,2,9 71.07 (3w) Alternative energy sources credit. (a) Definitions. In this subsection, "claimant" means a person who files a claim under this subsection.

AB767,2,12 (b) Filing claims. Subject to the limitations provided under this subsection, a claimant may claim as a credit against the taxes imposed under s. 71.02 or 71.08, up to the amount of those taxes, the following amounts:

AB767,2,14 1. An amount equal to the taxes imposed under subch. III of ch. 77 that the claimant paid in the taxable year on the purchase of any of the following:

AB767,2,19 a. Equipment, including integrated balance of system components, that captures solar energy, wind energy, or gas from livestock manure and other agricultural waste and converts such energy or gas into electricity, if the rated capacity of all such equipment at the point of interconnection does not exceed 25,000 watts of alternating or direct current.

AB767,2,23 b. Equipment that captures and uses solar energy for domestic water heating, including balance of system components, if the maximum output of such equipment, per installation, does not exceed a rated output of 35,000,000 British thermal units per day.

AB767,2,24 c. A solar domestic hot water service.

AB767,3,2 d. Professional services for the design, installation, maintenance, and repair of equipment and systems as described in subds. 1. a. to c.

AB767,3,5 2. An amount equal to 10 cents per kilowatt hour for energy generated in the taxable year from any of the sources listed in subd. 1. a. to c., if the energy is used exclusively by the claimant or returned to a utility as surplus energy.

AB767,3,13 (c) Limitations. 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 payment of amounts under par. (b). 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 interests.

AB767,3,15 (d) Administration. 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.

AB767, s. 3 Section 3. 71.10 (4) (cp) of the statutes is created to read:

AB767,3,17 71.10 (4) (cp) Alternative energy sources credit under s. 71.07 (3w).

AB767, s. 4 Section 4. 71.21 (4) of the statutes is amended to read:

AB767,3,21 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), and (5b) and passed through to partners shall be added to the partnership's income.

AB767, s. 5 Section 5. 71.26 (2) (a) of the statutes is amended to read:

AB767,4,15 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), (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 the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3g), (3n), (3t), (3w), and (5b) 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).

AB767, s. 6 Section 6. 71.28 (3w) of the statutes is created to read:

AB767,4,18 71.28 (3w) Alternative energy sources credit. (a) Definitions. In this subsection, "claimant" means a person who files a claim under this subsection.

AB767,4,21 (b) Filing claims. Subject to the limitations provided under this subsection, a claimant may claim as a credit against the taxes imposed under s. 71.23, up to the amount of those taxes, the following amounts:

AB767,4,23 1. An amount equal to the taxes imposed under subch. III of ch. 77 that the claimant paid in the taxable year on the purchase of any of the following:

AB767,5,3 a. Equipment, including integrated balance of system components, that captures solar energy, wind energy, or gas from livestock manure and other agricultural waste and converts such energy or gas into electricity, if the rated capacity of all such equipment at the point of interconnection does not exceed 25,000 watts of alternating or direct current.

AB767,5,7 b. Equipment that captures and uses solar energy for domestic water heating, including balance of system components, if the maximum output of such equipment, per installation, does not exceed a rated output of 35,000,000 British thermal units per day.

AB767,5,8 c. A solar domestic hot water service.

AB767,5,10 d. Professional services for the design, installation, maintenance, and repair of equipment and systems as described in subds. 1. a. to c.

AB767,5,13 2. An amount equal to 10 cents per kilowatt hour for energy generated in the taxable year from any of the sources listed in subd. 1. a. to c., if the energy is used exclusively by the claimant or returned to a utility as surplus energy.

AB767,5,21 (c) Limitations. 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 payment of amounts under par. (b). 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 interests.

AB767,5,23 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB767, s. 7 Section 7. 71.30 (3) (dm) of the statutes is created to read:

AB767,5,25 71.30 (3) (dm) Alternative energy sources credit under s. 71.28 (3w).

AB767, s. 8 Section 8. 71.34 (1) (g) of the statutes is amended to read:

AB767,6,4 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), (1dm), (1ds), (1dx), (3), (3g), (3n), (3t), (3w), and (5b) and passed through to shareholders.

AB767, s. 9 Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:

AB767,6,11 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (3n), (3w), and (5b) 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) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), and (5).

AB767, s. 10 Section 10. 71.47 (3w) of the statutes is created to read:

AB767,6,14 71.47 (3w) Alternative energy sources credit. (a) Definitions. In this subsection, "claimant" means a person who files a claim under this subsection.

AB767,6,17 (b) Filing claims. Subject to the limitations provided under this subsection, a claimant may claim as a credit against the taxes imposed under s. 71.43, up to the amount of those taxes, the following amounts: