LRB-5093/1
MES:jlg:jf
1997 - 1998 LEGISLATURE
March 11, 1998 - Introduced by Representatives Spillner, Ott, Green, Musser,
Hahn, Olsen and Lorge, cosponsored by Senator Roessler. Referred to
Committee on Agriculture.
AB901,1,5
1An Act to amend 71.05 (6) (a) 15., 71.08 (1) (intro.), 71.21 (4), 71.26 (2) (a), 71.34
2(1) (g), 71.45 (2) (a) 10. and 77.92 (4); and
to create 71.07 (3e), 71.10 (4) (cm),
371.28 (2e), 71.30 (3) (cm), 71.47 (2e) and 71.49 (1) (cm) of the statutes;
relating
4to: creating a nonrefundable income and franchise tax credit for agricultural
5education expenses, investments and sales taxes.
Analysis by the Legislative Reference Bureau
This bill creates a nonrefundable individual income tax credit and a
nonrefundable corporate income and franchise tax credit for various education and
environmental costs and expenses incurred by persons actively engaged in farming.
Because the credits are nonrefundable, no refund will be paid to a claimant if the
amount of the credit for which the claimant is otherwise eligible exceeds the
claimant's tax liability.
Under the bill, and subject to some limitations, an individual or corporate
claimant may claim against taxes imposed 5% of the educational costs incurred by
the claimant for the claimant, or the corporate claimant's employes, to attend courses
in the fields of agriculture or farm management. An individual or corporate claimant
may also claim, under the bill, 5% of the cost expended by a claimant to do any of the
following: 1) construct or repair water and waste management systems that are
related to farming; 2) limit and control soil erosion on the claimant's farmland; 3)
reforest the claimant's farmland; and 4) take corrective action to restore the
environment to minimize the effects of a discharge of agricultural chemicals on the
claimant's farmland.
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:
AB901,2,73
71.05
(6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
4(2di), (2dj), (2dL), (2dr), (2ds), (2dx)
, (3e) and (3s) and not passed through by a
5partnership, limited liability company or tax-option corporation that has added that
6amount to the partnership's, company's or tax-option corporation's income under s.
771.21 (4) or 71.34 (1) (g).
AB901, s. 2
8Section
2. 71.07 (3e) of the statutes is created to read:
AB901,2,109
71.07
(3e) Farmland education, investment and sales tax credit. (a)
10Definitions. In this subsection:
AB901,2,1111
1. "Agricultural use" has the meaning given in s. 91.01 (1).
AB901,2,1212
2. "Claimant" has the meaning given in sub. (3m) (a) 1.
AB901,2,1313
3. "Department" means the department of revenue.
AB901,2,1514
4. "Educational expenses" means amounts paid by the claimant for tuition and
15textbooks that relate to the claimant's attendance at an eligible institution.
AB901,3,216
5. "Eligible institution" means a center or institution within the University of
17Wisconsin System, a technical college that is located in this state or any institution
18of higher education located in this state that grants a bachelor's or higher degree and
19that is accredited by the North Central Association of Colleges and Schools, the
1Independent Schools Association of the Central States or the Wisconsin Nonpublic
2School Accrediting Association.
AB901,3,43
6. "Farming" means being actively engaged in a trade or business that involves
4the agricultural use of farmland.
AB901,3,55
7. "Farmland" has the meaning given in sub. (3m) (a) 3.
AB901,3,76
8. "Livestock" means cattle, swine, sheep, goats and other species of animals
7that may be used in the production of food for human consumption.
AB901,3,118
(b)
Filing claims. Subject to the limitations provided in this subsection, a
9claimant may claim as a credit against the tax imposed under s. 71.02, up to the
10amount of those taxes, any of the following amounts for which the claimant is
11eligible:
AB901,3,1412
1. An amount equal to 5% of the educational expenses incurred by the claimant,
13in the year to which the claim relates, for the claimant to attend courses in the fields
14of agriculture or farm management at an eligible institution.
AB901,3,1615
2. An amount equal to 5% of the cost expended by a claimant, in the year to
16which the claim relates, to do any of the following on the claimant's farmland:
AB901,3,1717
a. Construct, renovate or repair water and waste management systems.
AB901,3,1818
b. Limit and control soil erosion.
AB901,3,1919
c. Engage in the reforestation of farmland.
AB901,3,2020
d. Take corrective action, as defined in s. 94.73 (1) (b).
AB901,3,2121
(c)
Limitations. No credit may be allowed under this subsection:
AB901,3,2322
1. Unless a claim is filed with the department in conformity with the filing
23requirements in s. 71.03 (6) and (7).
AB901,3,2424
2. Unless it is claimed within the time period under s. 71.75 (2).
AB901,4,3
13. If the department determines that ownership of the farmland has been
2transferred to the claimant for the purpose of maximizing benefits under this
3subsection.
AB901,4,54
4. If the department determines that the claimant is not farming in the year
5to which the claim relates.
AB901,4,86
(d)
Change of business, carry-over, administration, timeliness, nonclaimants. 7Section 71.28 (4) (e), (f), (g), (h) and (i), as it applies to the credit under s. 71.28 (4),
8applies to the credit under this subsection.
AB901,4,1811
71.08
(1) Imposition. (intro.) If the tax imposed on a natural person, married
12couple filing jointly, trust or estate under s. 71.02, not considering the credits under
13ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2fd),
(3e), (3m), (6) and
14(9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd) and (2m) and 71.47 (1dd),
15(1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd) and (2m) and subchs. VIII and IX and
16payments to other states under s. 71.07 (7), is less than the tax under this section,
17there is imposed on that natural person, married couple filing jointly, trust or estate,
18instead of the tax under s. 71.02, an alternative minimum tax computed as follows:
AB901, s. 4
19Section
4. 71.10 (4) (cm) of the statutes is created to read:
AB901,4,2120
71.10
(4) (cm) Farmland education, investment and sales tax credit under s.
2171.07 (3e).
AB901,5,3
171.21
(4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
2(2dj), (2dL), (2ds), (2dx)
, (3e) and (3s) and passed through to partners shall be added
3to the partnership's income.
AB901,5,206
71.26
(2) (a)
Corporations in general. The "net income" of a corporation means
7the gross income as computed under the internal revenue code as modified under
8sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
9computed under s. 71.28 (1) and (3) to (5) plus the amount of the credit computed
10under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds)
and
, (1dx)
and (2e) and not passed
11through by a partnership, limited liability company or tax-option corporation that
12has added that amount to the partnership's, limited liability company's or tax-option
13corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from
14the sale or other disposition of assets the gain from which would be wholly exempt
15income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at
16a gain and minus deductions, as computed under the internal revenue code as
17modified under sub. (3), plus or minus, as appropriate, an amount equal to the
18difference between the federal basis and Wisconsin basis of any asset sold,
19exchanged, abandoned or otherwise disposed of in a taxable transaction during the
20taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).
AB901, s. 7
21Section
7. 71.28 (2e) of the statutes is created to read:
AB901,5,2322
71.28
(2e) Farmland education, investment and sales tax credit. (a)
23Definitions. In this subsection:
AB901,5,2424
1. "Agricultural use" has the meaning given in s. 91.01 (1).
AB901,5,2525
2. "Claimant" has the meaning given in sub. (2m) (a) 1.
AB901,6,1
13. "Department" means the department of revenue.
AB901,6,42
4. "Educational expenses" means amounts paid by the claimant for tuition and
3textbooks that relate to the claimant's employe's attendance at an eligible
4institution.
AB901,6,105
5. "Eligible institution" means a center or institution within the University of
6Wisconsin System, a technical college that is located in this state or any institution
7of higher education located in this state that grants a bachelor's or higher degree and
8that is accredited by the North Central Association of Colleges and Schools, the
9Independent Schools Association of the Central States or the Wisconsin Nonpublic
10School Accrediting Association.
AB901,6,1211
6. "Farming" means being actively engaged in a trade or business that involves
12the agricultural use of farmland.
AB901,6,1313
7. "Farmland" has the meaning given in sub. (2m) (a) 3.
AB901,6,1514
8. "Livestock" means cattle, swine, sheep, goats and other species of animals
15that may be used in the production of food for human consumption.
AB901,6,1916
(b)
Filing claims. Subject to the limitations provided in this subsection, a
17claimant may claim as a credit against the tax imposed under s. 71.23, up to the
18amount of those taxes, any of the following amounts for which the claimant is
19eligible:
AB901,6,2220
1. An amount equal to 5% of the educational expenses incurred by the claimant,
21in the year to which the claim relates, for the claimant's employes to attend courses
22in the fields of agriculture or farm management at an eligible institution.
AB901,6,2423
2. An amount equal to 5% of cost expended by a claimant, in the year to which
24the claim relates, to do any of the following on the claimant's farmland:
AB901,6,2525
a. Construct, renovate or repair water and waste management systems.
AB901,7,1
1b. Limit and control soil erosion.
AB901,7,22
c. Engage in the reforestation of farmland.
AB901,7,33
d. Take corrective action, as defined in s. 94.73 (1) (b).