Amendment AA2-ASA1-AB133

AB133-ASA1-AA2,241,1 588. Page 830, line 14: after that line insert:

AB133-ASA1-AA2,241,7 "4. If the benefit of a service is received in this state, as provided under this subsection, and the service is performed in a state that does not attribute the receipts from a service to the state in which the purchaser of the service receives the service, the taxpayer may elect, by a method prescribed by the department, to attribute the receipts from the service to this state in proportion to the direct cost of performing such service.".

AB133-ASA1-AA2,241,8 589. Page 832, line 13: after that line insert:

AB133-ASA1-AA2,241,9 " Section 1682nb. 71.04 (8) (b) of the statutes is amended to read:

AB133-ASA1-AA2,241,20 71.04 (8) (b) "Public utility", as used in this section, means any business entity which owns or operates any plant, equipment, property, franchise, or license for the transmission of communications or the production, transmission, sale, delivery, or furnishing of electricity, water or steam, the rates of charges for goods or services of which have been established or approved by a federal, state or local government or governmental agency. "Public utility" also means any business entity providing service to the public and engaged in the transportation of goods and persons for hire, as defined in s. 194.01 (4), regardless of whether or not the entity's rates or charges for services have been established or approved by a federal, state or local government or governmental agency. This paragraph does not apply to gas and electric companies for taxable years beginning after December 31, 1999.".

AB133-ASA1-AA2,241,22 590. Page 832, line 21: after "(9d)" insert "and the net business income of gas and electric companies shall be apportioned under sub. (4)".

AB133-ASA1-AA2,241,23 591. Page 832, line 21: after that line insert:

AB133-ASA1-AA2,241,24 " Section 1682pd. 71.04 (9) of the statutes is amended to read:

AB133-ASA1-AA2,242,14 71.04 (9) Nonresident income from multistate tax-option corporation. Nonresident individuals and nonresident estates and trusts deriving income from a tax-option corporation which is engaged in business within and without this state shall be taxed only on the income of the corporation derived from business transacted and property located in this state and losses and other items of the corporation deductible by such shareholders shall be limited to their proportionate share of the Wisconsin loss or other item, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state. For purposes of this subsection, all intangible income of tax-option corporations passed through to shareholders is business income that follows the situs of the business , except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.".

AB133-ASA1-AA2,242,16 592. Page 834, line 19: delete ", (2dy) and (3s)" and substitute "and, (2dy), (3s) and (5r)".

AB133-ASA1-AA2,242,17 593. Page 834, line 22: after that line insert:

AB133-ASA1-AA2,242,18 " Section 1685c. 71.05 (6) (b) 9. of the statutes is amended to read:

AB133-ASA1-AA2,243,3 71.05 (6) (b) 9. On assets held more than one year and on all assets acquired from a decedent, 60% of the capital gain as computed under the internal revenue code, not including capital gains for which the federal tax treatment is determined under section 406 of P.L. 99-514 and; not including amounts treated as ordinary income for federal income tax purposes because of the recapture of depreciation or any other reason; and not including amounts treated as capital gain for federal income tax purposes from the sale or exchange of a lottery prize. For purposes of this subdivision, the capital gains and capital losses for all assets shall be netted before application of the percentage.".

AB133-ASA1-AA2,243,4 594. Page 836, line 7: after that line insert:

AB133-ASA1-AA2,243,5 " Section 1688j. 71.05 (6) (b) 31. of the statutes is created to read:

AB133-ASA1-AA2,243,8 71.05 (6) (b) 31. For taxable years beginning after December 31, 1998, an amount up to $500 that an individual contributes to an individual who is a candidate for elective public office in this state.".

AB133-ASA1-AA2,243,9 595. Page 849, line 7: after that line insert:

AB133-ASA1-AA2,243,10 " Section 1710db. 71.07 (3m) (b) 1. a. of the statutes is amended to read:

AB133-ASA1-AA2,243,18 71.07 (3m) (b) 1. a. Subject to the limitations provided in this subsection and s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income taxes otherwise due, the amount derived under par. (c). If the allowable amount of claim exceeds the income taxes otherwise due on the claimant's income or if there are no Wisconsin income taxes due on the claimant's income, the amount of the claim not used as an offset against income taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft paid from the appropriation under s. 20.835 (2) (q) (dn).

AB133-ASA1-AA2, s. 1710dc Section 1710dc. 71.07 (3m) (b) 1. a. of the statutes, as affected by 1999 Wisconsin Act .... (this act), is repealed and recreated to read:

AB133-ASA1-AA2,244,4 71.07 (3m) (b) 1. a. Subject to the limitations provided in this subsection and s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income taxes otherwise due, the amount derived under par. (c). If the allowable amount of claim exceeds the income taxes otherwise due on the claimant's income or if there are no Wisconsin income taxes due on the claimant's income, the amount of the claim not used as an offset against income taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft paid from the appropriation under s. 20.835 (2) (q).".

AB133-ASA1-AA2,244,5 596. Page 849, line 7: after that line insert:

AB133-ASA1-AA2,244,6 " Section 1710df. 71.07 (3m) (c) 1. of the statutes is amended to read:

AB133-ASA1-AA2,244,13 71.07 (3m) (c) 1. Any claimant may claim against taxes otherwise due under this chapter 10% a percentage, as determined by the department under subd. 3., of the property taxes accrued in the taxable year to which the claim relates, up to a maximum claim of $1,000 $2,000 for taxable years ending before January 1, 2001, and up to a maximum claim of $1,500 for taxable years beginning after December 31, 2000, except that the credit under this subsection plus the credit under subch. IX may not exceed 95% of the property taxes accrued on the farm.

AB133-ASA1-AA2, s. 1710dg Section 1710dg. 71.07 (3m) (c) 3. of the statutes is created to read:

AB133-ASA1-AA2,244,20 71.07 (3m) (c) 3. The department shall annually adjust the percentage that is used to determine the amount of the claim under subd. 1. based on the estimated number of claims and the amount estimated to be expended from the appropriation under s. 20.835 (2) (q), as determined under s. 79.13. The department shall incorporate the annually adjusted percentage into the income tax forms and instructions.".

AB133-ASA1-AA2,244,22 597. Page 849, line 13: after "labor union" insert ", to travel expenses or to home office expenses".

AB133-ASA1-AA2,244,23 598. Page 849, line 20: after that line insert:

AB133-ASA1-AA2,244,24 " Section 2713g. 71.07 (5r) of the statutes is created to read:

AB133-ASA1-AA2,245,1 71.07 (5r) Education credit. (a) In this subsection:

AB133-ASA1-AA2,245,4 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.

AB133-ASA1-AA2,245,6 2. "Degree-granting program" means an educational program for which an associate, a bachelor's or a graduate degree is awarded upon successful completion.

AB133-ASA1-AA2,245,10 3. "Qualified postsecondary institution" means 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, notwithstanding s. 16.973 (1) (b).

AB133-ASA1-AA2,245,15 (b) A claimant may claim as a credit against the tax imposed under this subchapter an amount equal to 50% of the tuition that the claimant paid or incurred during the taxable year for an individual to participate in an education program of a qualified postsecondary institution, if the individual is enrolled in a degree-granting program.

AB133-ASA1-AA2,245,18 (c) A claimant may not claim the credit under par. (b) for any tuition amounts that the claimant excluded under s. 71.05 (6) (b) 28. or under section 127 of the Internal Revenue Code.

AB133-ASA1-AA2,245,20 (d) The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit under s. 71.28 (4), apply to the credit under this subsection.

AB133-ASA1-AA2,246,3 (e) 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.

AB133-ASA1-AA2,246,5 (f) Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.".

AB133-ASA1-AA2,246,6 599. Page 850, line 3: after that line insert:

AB133-ASA1-AA2,246,7 " Section 1715m. 71.07 (6m) of the statutes is created to read:

AB133-ASA1-AA2,246,9 71.07 (6m) Armed forces member tax credit. (a) Definitions. In this subsection:

AB133-ASA1-AA2,246,11 1. "Claimant" means an active duty member of the U.S. armed forces, as defined in 26 USC 7701 (a) (15).

AB133-ASA1-AA2,246,14 2. "Military income" means an amount of basic, special or incentive pay income, as those terms are used in 37 USC chapters 3 and 5, received by a claimant from the federal government.

AB133-ASA1-AA2,246,18 (b) Filing claims. Subject to the limitations and conditions provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, an amount up to $200 of military income for services performed by the claimant while he or she is stationed outside of the United States.

AB133-ASA1-AA2,246,20 (c) Limitations and conditions. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

AB133-ASA1-AA2,246,22 2. Part-year residents and nonresidents of this state are not eligible for the credit under this subsection.

AB133-ASA1-AA2,246,24 3. If both spouses of a married couple meet the definition of claimant under par. (a) 1., each spouse may claim the credit under this subsection.

AB133-ASA1-AA2,247,2 (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.".

AB133-ASA1-AA2,247,3 600. Page 851, line 1: after "(3s)," insert "(5r),".

AB133-ASA1-AA2,247,4 601. Page 851, line 2: after "(6)" insert ", (6m)".

AB133-ASA1-AA2,247,7 602. Page 851, line 2: delete the material beginning with "(2m)" and ending with "(2m) and (3)" on line 3 and substitute "(2m) and, (3) and (5r) and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m) and, (3) and (5r)".

AB133-ASA1-AA2,247,8 603. Page 851, line 7: after that line insert:

AB133-ASA1-AA2,247,9 " Section 1719j. 71.10 (4) (cm) of the statutes is created to read:

AB133-ASA1-AA2,247,10 71.10 (4) (cm) The armed forces member tax credit under s. 71.07 (6m).".

AB133-ASA1-AA2,247,11 604. Page 851, line 7: after that line insert:

AB133-ASA1-AA2,247,12 " Section 1719i. 71.10 (3) (a) (title) of the statutes is created to read:

AB133-ASA1-AA2,247,13 71.10 (3) (a) (title) Voluntary payments.

AB133-ASA1-AA2, s. 1719j Section 1719j. 71.10 (3) (a) of the statutes is renumbered 71.10 (3) (a) 1. and amended to read:

AB133-ASA1-AA2,247,22 71.10 (3) (a) 1. `Designation on return.' Every Any individual filing an income tax return who has a tax liability or is entitled to a tax refund may designate on the return an additional payment in the amount of $1 or a deduction from any refund due that individual in the amount of $1 for the Wisconsin election campaign fund for the use of eligible candidates under s. 11.50. If the individuals filing a married couple files a joint return have a tax liability or are entitled to a tax refund, each individual spouse may make a designation of $1 under this subsection.

AB133-ASA1-AA2, s. 1719jk Section 1719jk. 71.10 (3) (a) 2. and 3. of the statutes are created to read:

AB133-ASA1-AA2,248,3 71.10 (3) (a) 2. `Designation added to tax owed.' If the individual owes any tax, the individual shall remit in full the tax due and an additional $1 for the Wisconsin election campaign fund when the individual files a tax return.

AB133-ASA1-AA2,248,7 3. `Designation deducted from refund.' Except as provided under par. (c) if the individual is owed a refund for that year after crediting under ss. 71.75 (9) and 71.80 (3), the department of revenue shall deduct $1 for the Wisconsin election campaign fund from the amount of the refund.

AB133-ASA1-AA2, s. 1719jm Section 1719jm. 71.10 (3) (b) of the statutes is renumbered 71.10 (3) (f) and amended to read:

AB133-ASA1-AA2,249,2 71.10 (3) (f) Administration, certification of amounts confidentiality. The secretary of revenue shall provide a place for those designations on the face of the individual income tax return and shall provide next to that place a statement that a designation will not increase tax liability or reduce a refund. Annually on August 15, the secretary of revenue shall certify to the elections board, the department of administration and the state treasurer under s. 11.50 the total amount of received from all designations made during the preceding fiscal year. If any individual attempts to place any condition or restriction upon a designation, that individual is deemed not to have made a designation on his or her tax return Amounts designated for the Wisconsin election campaign fund under this subsection are not subject to refund to the taxpayer unless the taxpayer submits information to the satisfaction of the department of revenue within 18 months after the date taxes are due or the date the return is filed, whichever is later, that the amount designated is clearly in error. Any refund granted by the department of revenue under this subdivision shall be deducted from the moneys received under this subsection in the fiscal year that the refund is certified. The names of persons making designations under this subsection shall be strictly confidential.

AB133-ASA1-AA2, s. 1719jn Section 1719jn. 71.10 (3) (bm) of the statutes is created to read:

AB133-ASA1-AA2,249,8 71.10 (3) (bm) Errors; failure to remit correct amount. If an individual who owes a tax fails to remit an amount equal to or in excess of the total of the actual tax due, after error corrections, and the amount designated on the return for the Wisconsin election campaign fund, the designation for the Wisconsin election campaign fund is void.

AB133-ASA1-AA2, s. 1719jp Section 1719jp. 71.10 (3) (c) of the statutes is repealed and recreated to read:

AB133-ASA1-AA2,249,12 71.10 (3) (c) Errors; insufficient refund. If an individual is owed a refund that does not equal or exceed $1, after crediting under ss. 71.75 (9) and 71.80 (3) and after error corrections, the designation for the Wisconsin election campaign fund is void.

AB133-ASA1-AA2, s. 1719jr Section 1719jr. 71.10 (3) (d) of the statutes is created to read:

AB133-ASA1-AA2,249,15 71.10 (3) (d) Conditions. If an individual places any conditions on a designation for the Wisconsin election campaign fund, the designation is void.

AB133-ASA1-AA2, s. 1719jt Section 1719jt. 71.10 (3) (e) of the statutes is created to read:

AB133-ASA1-AA2,249,20 71.10 (3) (e) Void designation. If a designation for the Wisconsin election campaign fund is void, the department of revenue shall disregard the designation and determine amounts due, owed, refunded and received without regard to the void designation.".

AB133-ASA1-AA2,249,21 605. Page 851, line 9: after that line insert:

AB133-ASA1-AA2,249,22 " Section 1719p. 71.10 (4) (i) of the statutes is amended to read:

AB133-ASA1-AA2,250,4 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under subch. IX, homestead credit under subch. VIII, farmland tax relief credit under s. 71.07 (3m), farmers' drought property tax credit under s. 71.07 (2fd), earned income tax credit under s. 71.07 (9e), education credit under s. 71.07 (5r), estimated tax payments under s. 71.09, and taxes withheld under subch. X.".

AB133-ASA1-AA2,250,6 606. Page 853, line 21: delete ", (2dy) and (3s)" and substitute "and, (2dy), (3s) and (5r)".

AB133-ASA1-AA2,250,8 607. Page 873, line 19: after "both" insert ", or that buy or sell lottery prizes if the winning tickets were originally bought in this state".

AB133-ASA1-AA2,250,9 608. Page 873, line 21: after that line insert:

AB133-ASA1-AA2,250,10 " Section 1722yd. 71.23 (2) of the statutes is amended to read:

AB133-ASA1-AA2,251,7 71.23 (2) Franchise tax. For the privilege of exercising its franchise, buying or selling lottery prizes is the winning tickets were originally bought in this state or doing business in this state in a corporate capacity, except as provided under sub. (3), every domestic or foreign corporation, except corporations specified in s. 71.26 (1), and every nuclear decommissioning trust or reserve fund shall annually pay a franchise tax according to or measured by its entire Wisconsin net income of the preceding taxable year at the rate set forth in s. 71.27 (2). In addition, except as provided in sub. (3) and s. 71.26 (1), a corporation that ceases doing business in this state and a nuclear decommissioning trust or reserve fund that is terminated shall pay a special franchise tax according to or measured by its entire Wisconsin net income for the taxable year during which the corporation ceases doing business in this state or the nuclear decommissioning trust or reserve fund is terminated at the rates under s. 71.27 (2). Every corporation organized under the laws of this state or that derives income from sources within this state or from activities that are attributable to this state shall be deemed to be residing within this state for the purposes of this franchise tax. All provisions of this chapter and ch. 73 relating to income taxation of corporations shall apply to franchise taxes imposed under this subsection, unless the context requires otherwise. The tax imposed by this subsection on national banking associations shall be in lieu of all taxes imposed by this state on national banking associations to the extent it is not permissible to tax such associations under federal law.

AB133-ASA1-AA2, s. 1722yf Section 1722yf. 71.25 (5) (a) (intro.) of the statutes is amended to read:

AB133-ASA1-AA2,251,14 71.25 (5) (a) Apportionable income. (intro.) Except as provided in sub. (6), corporations engaged in business both within and without this state are subject to apportionment. Income, gain or loss from the sources listed in this paragraph is presumed apportionable. Apportionable income includes all income or loss of corporations, other than nonapportionable income as specified in par. (b), including, but not limited to, income, gain or loss from the following sources:

AB133-ASA1-AA2, s. 1722ym Section 1722ym. 71.25 (5) (a) 9. of the statutes is amended to read:

AB133-ASA1-AA2,251,24 71.25 (5) (a) 9. Interest and dividends if the operations of the payer are unitary with those of the payee, or if those operations are not unitary but the investment activity from which that income is derived is an integral part of a unitary business and the payer and payee are neither affiliates nor related as parent company and subsidiary. In this subdivision, "investment activity" includes decision making relating to the purchase and sale of stocks and other securities, investing surplus funds and the management and record keeping associated with corporate investments, not including activities of a broker or other agent in maintaining an investment portfolio.

AB133-ASA1-AA2, s. 1722yn Section 1722yn. 71.25 (5) (a) 10. of the statutes is amended to read:

AB133-ASA1-AA2,252,6 71.25 (5) (a) 10. Sale of intangible assets if the operations of the company in which the investment was made were unitary with those of the investing company, or if those operations were not unitary but the investment activity from which that gain or loss was derived is an integral part of a unitary business and the companies were neither affiliates nor related as parent company and subsidiary. In this subdivision, "investment activity" has the meaning given under subd. 9.".

AB133-ASA1-AA2, s. 1722ym Section 1722ym. 71.25 (5) (b) of the statutes is amended to read:

AB133-ASA1-AA2,252,15 71.25 (5) (b) Nonapportionable income. 1. Income, gain or loss from the sale of nonbusiness real property or nonbusiness tangible personal property, rental of nonbusiness real property or nonbusiness tangible personal property and royalties from nonbusiness real property or nonbusiness tangible personal property are nonapportionable and shall be allocated to the situs of the property , except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.

AB133-ASA1-AA2,252,21 2. All income, gain or loss from intangible property that is earned by a personal holding company, as defined in section 542 of the internal revenue code, as amended to December 31, 1974, shall be allocated to the residence of the taxpayer, except that all income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state shall be allocated to this state.".