71.07(5n)(a)5.a.a. “Manufacturing property factor" means a fraction, the numerator of which is the average value of the claimant's real and personal property assessed under s. 70.995, owned or rented and used in this state by the claimant during the taxable year to manufacture qualified production property, and the denominator of which is the average value of all the claimant's real and personal property owned or rented during the taxable year and used by the claimant to manufacture qualified production property.
71.07(5n)(a)5.b. b. For purposes of subd. 5. a., property owned by the claimant is valued at its original cost and property rented by the claimant is valued at an amount equal to the annual rental paid by the claimant, less any annual rental received by the claimant from sub-rentals, multiplied by 8.
71.07(5n)(a)5.c. c. For purposes of subd. 5. a., the average value of property is determined by averaging the values at the beginning and ending of the taxable year, except that the secretary of revenue may require the averaging of monthly values during the taxable year, if such averaging is reasonably required to properly reflect the average value of the claimant's property.
71.07(5n)(a)5.d. d. For purposes of subd. 5. a., a claimant who the department approves to be classified as a manufacturer for purposes of s. 70.995, but who is not eligible to be listed on the department's manufacturing roll until January 1 of the following year, may claim the credit in the year in which the manufacturing classification is approved.
71.07(5n)(a)6. 6. “Production gross receipts" means:
71.07(5n)(a)6.a. a. For taxable years beginning before January 1, 2019, gross receipts from the lease, rental, license, sale, exchange, or other disposition of qualified production property.
71.07(5n)(a)6.b. b. For taxable years beginning after December 31, 2018, the sum of gross receipts from the lease, rental, license, sale, exchange, or other disposition of qualified production property and insurance proceeds received as a result of the destruction of, or damage to, crops to the extent the proceeds are included in federal adjusted gross income for the taxable year.
71.07(5n)(a)7. 7. “Production gross receipts factor" means a fraction, the numerator of which is production gross receipts and the denominator of which is all gross income from whatever source, except for those items specifically excluded under the Internal Revenue Code as adopted by this state and otherwise excluded under Wisconsin law. For purposes of the denominator, income includes gross sales, gross dividends, gross interest income, gross rents, gross royalties, the gross sales price from the disposition of capital assets and business assets, gross income from pass-through entities, and all other gross receipts that are included in income, before apportionment for Wisconsin tax purposes under s. 71.04 (4).
71.07(5n)(a)8. 8. “Qualified production activities income" means the amount of the claimant's production gross receipts for the taxable year that exceeds the sum of the cost of goods sold that are allocable to such receipts, the direct costs that are allocable to such receipts, and the indirect costs multiplied by the production gross receipts factor. “Qualified production activities income" does not include any of the following:
71.07(5n)(a)8.a. a. Income from film production.
71.07(5n)(a)8.b. b. Income from producing, transmitting, or distributing electricity, natural gas, or potable water.
71.07(5n)(a)8.c. c. Income from constructing real property.
71.07(5n)(a)8.d. d. Income from engineering or architectural services performed with respect to constructing real property.
71.07(5n)(a)8.e. e. Income from the sale of food and beverages prepared by the claimant at a retail establishment.
71.07(5n)(a)8.f. f. Income from the lease, rental, license, sale, exchange, or other disposition of land.
71.07(5n)(a)9. 9. “Qualified production property" means either of the following:
71.07(5n)(a)9.a. a. Tangible personal property manufactured in whole or in part by the claimant on property that is assessed as manufacturing property under s. 70.995.
71.07(5n)(a)9.b. b. Tangible personal property produced, grown, or extracted in whole or in part by the claimant on or from property assessed as agricultural property under s. 70.32 (2) (a) 4.
71.07(5n)(b) (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of the tax, an amount equal to one of the following percentages of the claimant's eligible qualified production activities income in the taxable year:
71.07(5n)(b)1. 1. For taxable years beginning after December 31, 2012, and before January 1, 2014, 1.875 percent.
71.07(5n)(b)2. 2. For taxable years beginning after December 31, 2013, and before January 1, 2015, 3.75 percent.
71.07(5n)(b)3. 3. For taxable years beginning after December 31, 2014, and before January 1, 2016, 5.025 percent.
71.07(5n)(b)4. 4. For taxable years beginning after December 31, 2015, 7.5 percent.
71.07(5n)(c) (c) Limitations.
71.07(5n)(c)1.1. 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 share of the income described 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.
71.07(5n)(c)2. 2. The credit under par. (b), including any credits carried over, may be offset only against the amount of the tax imposed upon or measured by the business operations of the claimant on which the credit is computed.
71.07(5n)(c)3. 3. For shareholders of a tax-option corporation, the credit may be offset only against the tax imposed on the shareholder's prorated share of the tax-option corporation's income.
71.07(5n)(c)4. 4. For partners of a partnership, the credit may be offset only against the tax imposed on the partner's distributive share of partnership income.
71.07(5n)(c)5. 5. For members of a limited liability company, the credit may be offset only against the tax imposed on the member's distributive share of the limited liability company's income.
71.07(5n)(d) (d) Administration.
71.07(5n)(d)1.1. 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.
71.07(5n)(d)2. 2. For purposes of determining a claimant's eligible qualified production activities income under this subsection, the claimant shall multiply the claimant's qualified production activities income from property manufactured by the claimant by the manufacturing property factor and qualified production activities income from property produced, grown, or extracted by the claimant by the agriculture property factor.
71.07(5n)(d)3. 3. The amount of the eligible qualified production activities income that a claimant may claim in computing the credit under par. (b) shall be reduced by the amount of the qualified production activities income taxed by another state upon which the credit under sub. (7) is claimed.
71.07(5r) (5r)Postsecondary education credit.
71.07(5r)(a) (a) Definitions. In this subsection:
71.07(5r)(a)1. 1. “Claimant" means a sole proprietor, a partner, a member of a limited liability company, or a shareholder of a tax-option corporation who files a claim under this subsection.
71.07(5r)(a)2. 2. “Course of instruction" has the meaning given in s. 440.52 (1) (c).
71.07(5r)(a)3. 3. “Family member" means a spouse or an individual related by blood, marriage, or adoption within the 3rd degree of kinship as computed under s. 990.001 (16).
71.07(5r)(a)4. 4. “Managing employee" means an individual who wholly or partially exercises operational or managerial control over, or who directly or indirectly conducts, the operation of the claimant's business.
71.07(5r)(a)5. 5. “Paid or incurred" includes any amount paid by the claimant to reimburse an individual for the tuition that the individual paid or incurred.
71.07(5r)(a)6. 6. “Qualified postsecondary institution" means all of the following:
71.07(5r)(a)6.a. a. A University of Wisconsin System institution, a technical college system institution, or a regionally accredited 4-year nonprofit college or university having its regional headquarters and principal place of business in this state.
71.07(5r)(a)6.b. b. A school approved under s. 440.52, if the delivery of education occurs in this state.
71.07(5r)(b) (b) Filing claims. 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 equal to the following:
71.07(5r)(b)1. 1. Twenty-five percent of the tuition that the claimant paid or incurred for an individual to participate in an education program of a qualified postsecondary institution, if the individual was enrolled in a course of instruction and eligible for a grant from the Federal Pell Grant Program.
71.07(5r)(b)2. 2. Thirty percent of the tuition that the claimant paid or incurred for an individual to participate in an education program of a qualified postsecondary institution, if the individual was enrolled in a course of instruction that relates to a projected worker shortage in this state, as determined by the local workforce development boards established under 29 USC 2832, and if the individual was eligible for a grant from the Federal Pell Grant Program.
71.07(5r)(c) (c) Limitations.
71.07(5r)(c)1.1. No credit may be allowed under par. (b) unless the claimant certifies to the department of revenue that the claimant will not be reimbursed for any amount of tuition for which the claimant claims a credit under par. (b).
71.07(5r)(c)2. 2. A claimant may not claim the credit under par. (b) for any tuition amounts that the individual described under par. (b) excluded under s. 71.05 (6) (b) 28. or under section 127 of the Internal Revenue Code.
71.07(5r)(c)3. 3. A claimant may not claim the credit under par. (b) for any tuition amounts that the claimant paid or incurred for a family member of the claimant or for a family member of a managing employee unless all of the following apply:
71.07(5r)(c)3.a. a. The family member was employed an average of at least 20 hours per week as an employee of the claimant, or the claimant's business, during the one-year period prior to commencing participation in the education program in connection with which the claimant claims a credit under par. (b).
71.07(5r)(c)3.b. b. The family member is enrolled in a course of instruction that is substantially related to the claimant's business.
71.07(5r)(c)3m. 3m. A claimant may not claim the credit under par. (b) for any tuition amounts that the claimant paid or incurred for an individual who is not a resident of this state.
71.07(5r)(c)4. 4. The claimant shall claim the credit for the taxable year in which the individual graduates from a course of instruction in an amount equal to the total amount the claimant paid or incurred under par. (b) for all taxable years in which the claimant paid or incurred such amounts related to that individual.
71.07(5r)(c)5. 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 payment of tuition 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 interest.
71.07(5r)(d) (d) Administration.
71.07(5r)(d)1.1. 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.
71.07(5r)(d)2. 2. No credit may be claimed under this subsection for taxable years beginning after December 31, 2013. Credits under this subsection for taxable years that begin before January 1, 2014, may be carried forward to taxable years that begin after December 31, 2013.
71.07(5rm) (5rm)Water consumption credit.
71.07(5rm)(a) (a) Definitions. In this subsection:
71.07(5rm)(a)1. 1. “Ccf" means 100 cubic feet.
71.07(5rm)(a)2. 2. “Claimant" means a person who files a claim under this subsection, who is an industrial customer of a municipal water utility that is located in a federal renewal community zone in this state, and whose average annual water consumption from that utility for a 24-month period exceeds 1,000,000 Ccf.
71.07(5rm)(b) (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2009, and before January 1, 2014, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of the tax, the amount determined as follows, except that the maximum amount that a claimant may claim in a taxable year under this subsection is $300,000:
71.07(5rm)(b)1. 1. Subtract the claimant's 2009 water usage costs from the claimant's water usage costs for the taxable year.
71.07(5rm)(b)2. 2. If the amount determined under subd. 1. is a positive number, multiply that amount by 0.50.
71.07(5rm)(c) (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.
71.07(5rm)(d) (d) Administration.
71.07(5rm)(d)1.1. 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.
71.07(5rm)(d)2. 2. No credit may be claimed under this subsection for taxable years beginning after December 31, 2013. Credits under this subsection for taxable years that begin before January 1, 2014, may be carried forward to taxable years that begin after December 31, 2013.
71.07(6) (6)Married persons credit.
71.07(6)(a) (a) For taxable years beginning before January 1, 1998, married persons filing a joint return, except those who reduce their gross income under section 911 or 931 of the internal revenue code, may claim as a credit against, but not to exceed the amount of, Wisconsin net income taxes otherwise due an amount equal to 2 percent of the earned income of the spouse with the lower earned income, but not more than $300. In this paragraph, “earned income" means qualified earned income, as defined in section 221 (b) of the internal revenue code as amended to December 31, 1985, plus employee business expenses under section 62 (2) (B) to (D) of that code, allocable to Wisconsin under s. 71.04, plus amounts received by the individual for services performed in the employ of the individual's spouse minus the amount of disability income excluded under s. 71.05 (6) (b) 4. and minus any other amount not subject to tax under this chapter. Earned income is computed notwithstanding the fact that each spouse owns an undivided one-half interest in the whole of the marital property. A marital property agreement or unilateral statement under ch. 766 transferring income between spouses has no effect in computing earned income under this paragraph.
71.07(6)(am)1.1. In this paragraph, “ earned income" means qualified earned income, as defined in section 221 (b) of the internal revenue code as amended to December 31, 1985, plus employee business expenses under section 62 (2) (B) to (D) of that code, allocable to Wisconsin under s. 71.04, plus amounts received by the individual for services performed in the employ of the individual's spouse minus the amount of disability income excluded under s. 71.05 (6) (b) 4. and minus any other amount not subject to tax under this chapter. Earned income is computed notwithstanding the fact that each spouse owns an undivided one-half interest in the whole of the marital property. A marital property agreement or unilateral statement under ch. 766 transferring income between spouses has no effect in computing earned income under this paragraph.
71.07(6)(am)2. 2. Married persons filing a joint return, except those who reduce their gross income under section 911 or 931 of the Internal Revenue Code, may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, an amount equal to one of the following:
71.07(6)(am)2.a. a. For taxable years beginning after December 31, 1997, and before January 1, 1999, 2.17 percent of the earned income of the spouse with the lower earned income, but not more than $304.
71.07(6)(am)2.b. b. For taxable years beginning after December 31, 1998, and before January 1, 2000, 2.5 percent of the earned income of the spouse with the lower earned income, but not more than $350.
71.07(6)(am)2.c. c. For taxable years beginning after December 31, 1999, and before January 1, 2001, 2.75 percent of the earned income of the spouse with the lower earned income, but not more than $440.
71.07(6)(am)2.d. d. For taxable years beginning after December 31, 2000, 3 percent of the earned income of the spouse with the lower earned income, but not more than $480.
71.07(6)(b) (b) A claimant who has filed a timely claim under this subsection may file an amended claim with the department of revenue within 4 years of the last day prescribed by law for filing the original claim.
71.07(6e) (6e)Veterans and surviving spouses property tax credit.
71.07(6e)(a)(a) Definitions. In this subsection:
71.07(6e)(a)1. 1. “Claimant" means an eligible unremarried surviving spouse, an eligible veteran, or an eligible spouse who files a claim under this subsection.
71.07(6e)(a)1m. 1m. “Eligible spouse" means the spouse of an eligible veteran who files a separate return.
71.07(6e)(a)2. 2. “Eligible unremarried surviving spouse" means an unremarried surviving spouse of one of the following, as verified by the department of veterans affairs:
71.07(6e)(a)2.a. a. An individual who had served on active duty in the U.S. armed forces or in forces incorporated as part of the U.S. armed forces; who was a resident of this state at the time of entry into that active service or who had been a resident of this state for any consecutive 5-year period after entry into that active duty service; and who, while a resident of this state, died while on active duty.
71.07(6e)(a)2.b. b. An individual who had served on active duty under honorable conditions in the U.S. armed forces or in forces incorporated as part of the U.S. armed forces; who was a resident of this state at the time of entry into that active service or who had been a resident of this state for any consecutive 5-year period after entry into that active duty service; who was a resident of this state at the time of his or her death; and who had either a service-connected disability rating of 100 percent under 38 USC 1114 or 1134 or a 100 percent disability rating based on individual unemployability.
71.07(6e)(a)2.c. c. An individual who had served in the national guard or a reserve component of the U.S. armed forces; who was a resident of this state at the time of entry into that service or who had been a resident of this state for any consecutive 5-year period after entry into that service; and who, while a resident of this state, died in the line of duty while on active or inactive duty for training purposes.
71.07(6e)(a)2.d. d. An individual who had served on active duty under honorable conditions in the U.S. armed forces or in forces incorporated as part of the U.S. armed forces; who was a resident of this state at the time of entry into that active service or who had been a resident of this state for any consecutive 5-year period after entry into that active duty service; who was a resident of this state at the time of his or her death; and following the individual's death, his or her spouse began to receive, and continues to receive, dependency and indemnity compensation, as defined in 38 USC 101 (14).
71.07(6e)(a)3. 3. “Eligible veteran" means an individual who is verified by the department of veterans affairs as meeting all of the following conditions:
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2017-18 Wisconsin Statutes updated through 2019 Wis. Act 184 and through all Supreme Court and Controlled Substances Board Orders filed before and in effect on March 28, 2020. Published and certified under s. 35.18. Changes effective after March 28, 2020, are designated by NOTES. (Published 3-28-20)