LRBs0287/2
JK:cjs:ch
2003 - 2004 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO 2003 SENATE BILL 268
January 16, 2004 - Offered by
Committee on Homeland Security, Veterans and
Military Affairs and Government Reform.
SB268-SSA1,1,4
1An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2)
2(a) 10. and 77.92 (4); and
to create 71.07 (5r), 71.10 (4) (cd), 71.28 (5r), 71.30
3(3) (dm), 71.47 (5r) and 71.49 (1) (dm) of the statutes;
relating to: an education
4tax credit for businesses.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB268-SSA1,1,117
71.05
(6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
8(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3s),
and (3t)
, and (5r) and not passed
9through by a partnership, limited liability company, or tax-option corporation that
10has added that amount to the partnership's, company's, or tax-option corporation's
11income under s. 71.21 (4) or 71.34 (1) (g).
SB268-SSA1,2,1
171.07
(5r) E
ducation credit. (a) In this subsection:
SB268-SSA1,2,42
1. "Claimant" means a sole proprietor, a partner, a member of a limited liability
3company, or a shareholder of a tax-option corporation who files a claim under this
4subsection.
SB268-SSA1,2,65
2. "Degree-granting program" means an educational program for which an
6associate, a bachelor's, or a graduate degree is awarded upon successful completion.
SB268-SSA1,2,77
3. "Family member" has the meaning given in s. 157.061 (7).
SB268-SSA1,2,108
4. "Managing employee" means an individual who wholly or partially exercises
9operational or managerial control over, or who directly or indirectly conducts, the
10operation of the claimant's business.
SB268-SSA1,2,1111
5. "Poverty line" has the meaning given under s. 49.001 (5).
SB268-SSA1,2,1212
6. "Qualified postsecondary institution" means all of the following:
SB268-SSA1,2,1513
a. A University of Wisconsin System institution, a technical college system
14institution, or a regionally accredited 4-year nonprofit college or university having
15its regional headquarters and principal place of business in this state.
SB268-SSA1,2,1716
b. A school approved under s. 45.54, if the school has a physical presence, and
17the delivery of education occurs, in this state.
SB268-SSA1,2,1918
(b) Subject to the limitations provided in this subsection, a claimant may claim
19as a credit against the tax imposed under s. 71.02 an amount equal to the following:
SB268-SSA1,2,2320
1. Fifty percent of the tuition that the claimant paid or incurred during the
21taxable year for an individual to participate in an education program of a qualified
22postsecondary institution, if the individual was enrolled in a degree-granting
23program.
SB268-SSA1,3,424
2. Seventy five percent of the tuition that the claimant paid or incurred during
25the taxable year for an individual to participate in an education program of a
1qualified postsecondary institution, if the individual was enrolled in a
2degree-granting program and if the individual's taxable income in the year prior to
3commencing participation in the education program in connection with which a
4credit is claimed is not more than 185% of the poverty line.
SB268-SSA1,3,95
(bm) 1. No credit may be allowed under par. (b) unless the claimant obtains
6written certification from a qualified postsecondary institution concerning the
7amount of tuition that the claimant paid or incurred during the taxable year for an
8individual to participate in an education program of the qualified postsecondary
9institution and includes a copy of the certification with the claimant's return.
SB268-SSA1,3,1910
2. No credit may be allowed under par. (b) 2. unless the claimant obtains
11written certification from a qualified postsecondary institution that the taxable
12income of the individual for whom the claimant has paid or incurred tuition during
13the taxable year for the individual to participate in an education program of the
14qualified postsecondary institution is not more than 185% of the poverty line and
15includes a copy of the certification with the claimant's return. For purposes of this
16subdivision and par. (b) 2., if an individual for whom the claimant has paid or
17incurred tuition is claimed as a dependent on another person's tax return, the
18individual's taxable income shall be the taxable income of the person on whose return
19the individual is claimed as a dependent.
SB268-SSA1,3,2220
3. No credit may be allowed under par. (b) unless the claimant certifies to the
21department of revenue that the claimant will not be reimbursed for any amount of
22tuition for which the claimant claims a credit under par. (b).
SB268-SSA1,3,2523
(c) A claimant may not claim the credit under par. (b) for any tuition amounts
24that the claimant excluded under s. 71.05 (6) (b) 28. or under section
127 of the
25Internal Revenue Code.
SB268-SSA1,4,3
1(cm) A claimant may not claim the credit under par. (b) for any tuition amounts
2that the claimant paid or incurred for a family member of the claimant or for a family
3member of a managing employee unless all of the following apply:
SB268-SSA1,4,74
1. The family member was employed an average of at least 20 hours a week as
5an employee of the claimant, or the claimant's business, during the one-year period
6prior to commencing participation in the education program in connection with
7which the claimant claims a credit under par. (b).
SB268-SSA1,4,98
2. The family member is enrolled in a degree-granting program that is
9substantially related to the claimant's business.
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3. The family member is making satisfactory progress towards completing the
11degree-granting program under subd. 2.
SB268-SSA1,4,1312
(d) The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit
13under s. 71.28 (4), apply to the credit under this subsection.
SB268-SSA1,4,2114
(e) Partnerships, limited liability companies, and tax-option corporations may
15not claim the credit under this subsection, but the eligibility for, and the amount of,
16the credit are based on their payment of tuition under par. (b). A partnership, limited
17liability company, or tax-option corporation shall compute the amount of credit that
18each of its partners, members, or shareholders may claim and shall provide that
19information to each of them. Partners, members of limited liability companies, and
20shareholders of tax-option corporations may claim the credit in proportion to their
21ownership interest.
SB268-SSA1,4,2322
(f) Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4),
23applies to the credit under this subsection.
SB268-SSA1,5,324
(g) The department of revenue shall biennially submit a report to the
25legislature under s. 13.172 (2) that identifies each qualified postsecondary
1institution for which it has received written certification from a claimant under par.
2(bm). The report shall specify the total amount of the tuition for each such institution
3that is claimed as a credit under this subsection in the previous biennium.
SB268-SSA1,5,55
71.10
(4) (cd) The education credit under s. 71.07 (5r).
SB268-SSA1,5,108
71.21
(4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
9(2dj), (2dL), (2dm), (2ds), (2dx), (3g),
, (3s),
and (3t)
, and (5r) and passed through to
10partners shall be added to the partnership's income.
SB268-SSA1,6,513
71.26
(2) (a)
Corporations in general. The "net income" of a corporation means
14the gross income as computed under the Internal Revenue Code as modified under
15sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
16computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c)
177., the amount of the credit under s. 71.28 (3) that the taxpayer added to income
18under this paragraph at the time that the taxpayer first claimed the credit plus the
19amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm),
20(1ds), (1dx), (3g),
and (3t)
, and (5r) and not passed through by a partnership, limited
21liability company, or tax-option corporation that has added that amount to the
22partnership's, limited liability company's, or tax-option corporation's income under
23s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from the sale or other disposition
24of assets the gain from which would be wholly exempt income, as defined in sub. (3)
25(L), if the assets were sold or otherwise disposed of at a gain and minus deductions,
1as computed under the Internal Revenue Code as modified under sub. (3), plus or
2minus, as appropriate, an amount equal to the difference between the federal basis
3and Wisconsin basis of any asset sold, exchanged, abandoned, or otherwise disposed
4of in a taxable transaction during the taxable year, except as provided in par. (b) and
5s. 71.45 (2) and (5).
SB268-SSA1,6,77
71.28
(5r) Education credit. (a) In this subsection:
SB268-SSA1,6,88
1. "Claimant" means a corporation that files a claim under this subsection.
SB268-SSA1,6,109
2. "Degree-granting program" means an education program for which an
10associate, a bachelor's, or a graduate degree is awarded upon successful completion.
SB268-SSA1,6,1111
3. "Family member" has the meaning given in s. 157.061 (7).
SB268-SSA1,6,1412
4. "Managing employee" means an individual who wholly or partially exercises
13operational or managerial control over, or who directly or indirectly conducts, the
14operation of the claimant's business.
SB268-SSA1,6,1515
5. "Poverty line" has the meaning given under s. 49.001 (5).
SB268-SSA1,6,1616
6. "Qualified postsecondary institution" means all of the following:
SB268-SSA1,6,1917
a. A University of Wisconsin System institution, a technical college system
18institution, or a regionally accredited 4-year nonprofit college or university having
19its regional headquarters and principal place of business in this state.
SB268-SSA1,6,2120
b. A school approved under s. 45.54, if the school has a physical presence, and
21the delivery of education occurs, in this state.
SB268-SSA1,6,2322
(b) Subject to the limitations provided in this subsection, a claimant may claim
23as a credit against the tax imposed under s. 71.23 an amount equal to the following:
SB268-SSA1,7,224
1. Fifty percent of the tuition that the claimant paid or incurred during the
25taxable year for an individual to participate in an education program of a qualified
1postsecondary institution, if the individual was enrolled in a degree-granting
2program.
SB268-SSA1,7,83
2. Seventy five percent of the tuition that the claimant paid or incurred during
4the taxable year for an individual to participate in an education program of a
5qualified postsecondary institution, if the individual was enrolled in a
6degree-granting program and if the individual's taxable income in the year prior to
7commencing participation in the education program in connection with which a
8credit is claimed is not more than 185% of the poverty line.
SB268-SSA1,7,139
(bm) 1. No credit may be allowed under par. (b) unless the claimant obtains
10written certification from a qualified postsecondary institution concerning the
11amount of tuition that the claimant paid or incurred during the taxable year for an
12individual to participate in an education program of the qualified postsecondary
13institution and includes a copy of the certification with the claimant's return.
SB268-SSA1,7,2314
2. No credit may be allowed under par. (b) 2. unless the claimant obtains
15written certification from a qualified postsecondary institution that the taxable
16income of the individual for whom the claimant has paid or incurred tuition during
17the taxable year for the individual to participate in an education program of the
18qualified postsecondary institution is not more than 185% of the poverty line and
19includes a copy of the certification with the claimant's return. For purposes of this
20subdivision and par. (b) 2., if an individual for whom the claimant has paid or
21incurred tuition is claimed as a dependent on another person's tax return, the
22individual's taxable income shall be the taxable income of the person on whose return
23the individual is claimed as a dependent.
SB268-SSA1,8,3
13. No credit may be allowed under par. (b) unless the claimant certifies to the
2department of revenue that the claimant will not be reimbursed for any amount of
3tuition for which the claimant claims a credit under par. (b).
SB268-SSA1,8,54
(c) A claimant may not claim the credit under par. (b) for any tuition amounts
5that the claimant has excluded under section
127 of the Internal Revenue Code.
SB268-SSA1,8,86
(cm) A claimant may not claim the credit under par. (b) for any tuition amounts
7that the claimant paid or incurred for a family member of a managing employee
8unless all of the following apply:
SB268-SSA1,8,129
1. The family member was employed an average of at least 20 hours a week as
10an employee of the claimant, or the claimant's business, during the one-year period
11prior to commencing participation in the education program in connection with
12which the claimant claims a credit under par. (b).
SB268-SSA1,8,1413
2. The family member is enrolled in a degree-granting program that is
14substantially related to the claimant's business.
SB268-SSA1,8,1615
3. The family member is making satisfactory progress towards completing the
16degree-granting program under subd. 2.
SB268-SSA1,8,1817
(d) The carry-over provisions of sub. (4) (e) and (f), as they apply to the credit
18under sub. (4), apply to the credit under this subsection.
SB268-SSA1,9,219
(e) Partnerships, limited liability companies, and tax-option corporations may
20not claim the credit under this subsection, but the eligibility for, and the amount of,
21the credit are based on their payment of tuition under par. (b). A partnership, limited
22liability company, or tax-option corporation shall compute the amount of credit that
23each of its partners, members, or shareholders may claim and shall provide that
24information to each of them. Partners, members of limited liability companies, and
1shareholders of tax-option corporations may claim the credit in proportion to their
2ownership interest.
SB268-SSA1,9,43
(f) Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies
4to the credit under this subsection.
SB268-SSA1,9,95
(g) The department of revenue shall biennially submit a report to the
6legislature under s. 13.172 (2) that identifies each qualified postsecondary
7institution for which it has received written certification from a claimant under par.
8(bm). The report shall specify the total amount of the tuition for each such institution
9that is claimed as a credit under this subsection in the previous biennium.
SB268-SSA1, s. 7
10Section
7. 71.30 (3) (dm) of the statutes is created to read: