SB261,9,43 (c) The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit
4under s. 71.28 (4), apply to the credit under this subsection.
SB261,9,125 (d) Partnerships, limited liability companies, and tax-option corporations may
6not claim the credit under this subsection, but the eligibility for, and the amount of,
7the credit are based on the amounts described under par. (b) that are attributable to
8their business operations. A partnership, limited liability company, or tax-option
9corporation shall compute the amount of credit that each of its partners, members,
10or shareholders may claim and shall provide that information to each of them.
11Partners, members of limited liability companies, and shareholders of tax-option
12corporations may claim the credit in proportion to their ownership interest.
SB261,9,1413 (e) Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4),
14applies to the credit under this subsection.
SB261, s. 12 15Section 12. 71.49 (1) (eop) of the statutes is created to read:
SB261,9,1616 71.49 (1) (eop) Qualified new business venture credit under s. 71.47 (5d).
SB261, s. 13 17Section 13. 77.92 (4) of the statutes is amended to read:
SB261,9,2518 77.92 (4) "Net business income", with respect to a partnership, means taxable
19income as calculated under section 703 of the Internal Revenue Code; plus the items
20of income and gain under section 702 of the Internal Revenue Code, including taxable
21state and municipal bond interest and excluding nontaxable interest income or
22dividend income from federal government obligations; minus the items of loss and
23deduction under section 702 of the Internal Revenue Code, except items that are not
24deductible under s. 71.21; plus guaranteed payments to partners under section 707
25(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),

1(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), and (3g), and (3s), and (5d); and plus or
2minus, as appropriate, transitional adjustments, depreciation differences, and basis
3differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain,
4loss, and deductions from farming. "Net business income", with respect to a natural
5person, estate, or trust, means profit from a trade or business for federal income tax
6purposes and includes net income derived as an employee as defined in section 3121
7(d) (3) of the Internal Revenue Code.
SB261, s. 14 8Section 14. 560.03 (24) to (27) of the statutes are created to read:
SB261,10,159 560.03 (24) In cooperation with the department of financial institutions and
10the Board of Regents of the University of Wisconsin System, annually conduct and
11publish the results of a study of Wisconsin businesses to determine new business
12formation trends and identify obstacles faced by new Wisconsin businesses and areas
13where changes in governmental policy may satisfy the needs of new Wisconsin
14businesses. As part of the study, the department of commerce shall conduct a survey
15of Wisconsin businesses.
SB261,10,19 16(25) In cooperation with the department of financial institutions and the Board
17of Regents of the University of Wisconsin System, provide education and other
18support to facilitate the development networks of investors that review new
19businesses or proposed new businesses for potential investment.
SB261,11,4 20(26) Certify businesses as qualified new business ventures for purposes of ss.
2171.07 (5d), 71.28 (5d), and 71.47 (5d). The department shall promulgate rules for the
22administration of this subsection. The rules shall require a business desiring
23certification to submit an application to the department. The department shall
24maintain a list of businesses certified under this subsection and shall permit public
25access to the list through the department's Internet website. The department shall

1notify the department of revenue of every business certified under this subsection
2and the date on which any such business is decertified. A business may be certified
3under this subsection, and may maintain such certification, only if the business
4satisfies all of the following conditions:
SB261,11,55 (a) It has its headquarters in this state.
SB261,11,76 (b) At least 51 percent of the employees employed by the business are employed
7in this state.
SB261,11,98 (c) Its average annual net income for each of the 2 taxable years immediately
9preceding the taxable year for which a credit is claimed does not exceed $20,000,000.
SB261,11,1110 (d) It's net worth in the taxable year for which a credit is claimed does not
11exceed $75,000,000.
SB261,11,1312 (e) It is not engaged predominantly in providing professional services by
13accountants, lawyers, or physicians.
SB261,11,1514 (f) It is not engaged predominantly in trade or in the leisure and hospitality
15industry.
SB261,11,1616 (g) It is not engaged in banking or lending or in developing real estate for resale.
SB261,11,1817 (h) It does not make loans to, or investments in, certified capital companies, as
18defined in s. 560.30 (2).
SB261,11,2019 (i) It has been in operation in this state for at least 3 consecutive years but not
20more than 10 consecutive years.
SB261,11,21 21(27) Certify venture capital funds as follows:
SB261,11,2422 (a) The department shall promulgate rules establishing a procedure for the
23department to certify venture capital funds for purposes of the capital gains tax
24exemption under s. 71.05 (24). The rules shall do all of the following:
SB261,12,2
11. Require a venture capital fund that desires to obtain a certification to file an
2application with the department.
SB261,12,73 2. Permit a venture capital fund to obtain a certification only if the venture
4capital fund is a private seed and venture capital partnership or entity fund, the
5venture capital fund has its principal place of business in Wisconsin, and the venture
6capital fund commits to make equity investments in businesses, as described under
7sub. (26), that are located in Wisconsin.
SB261,12,118 3. Require an applicant for certification or a certified venture capital fund to
9provide the department with any information the department determines is
10necessary to ensure eligibility for certification and compliance with this subsection
11and rules promulgated under this subsection.
SB261,12,2012 (b) Upon request of any person, the department shall issue a written notice
13indicating whether a venture capital fund is certified under this subsection for
14purposes of the capital gains tax exemption under s. 71.05 (24). Each notice under
15this paragraph that indicates a venture capital fund is certified shall include the
16following statement: "The Wisconsin Department of Commerce has not
17recommended or approved an investment in this venture capital fund or assessed
18the merits or risks of such an investment. Investors should rely solely on their
19own investigation and analysis and seek investment, financial, legal, and tax
20advice before making their own decision regarding investment in this enterprise.
"
SB261,12,2321 (c) Upon the issuance or discontinuance of a certification, the department of
22commerce shall notify the department of revenue and provide the department of
23revenue a copy of the certification or discontinuance.
SB261, s. 15 24Section 15 . Nonstatutory provisions.
SB261,13,4
1(1) Rules. The department of commerce shall submit in proposed form the rules
2required under section 560.03 (26) and (27) of the statutes, as created by this act, to
3the legislative council staff under section 227.15 (1) of the statutes no later than the
4first day of the 6th month beginning after the effective date of this subsection.
SB261, s. 16 5Section 16. Initial applicability.
SB261,13,96 (1) Qualified new business venture credit. The treatment of sections 71.05
7(6) (a) 15., 71.07 (5d), 71.10 (4) (gx), 71.21 (4), 71.26 (2) (a), 71.28 (5d), 71.30 (3) (eop),
871.34 (1) (g), 71.45 (2) (a) 10., 71.47 (5d), 71.49 (1) (eop), and 77.92 (4) of the statutes
9first applies to taxable years beginning on January 1, 2006.
SB261,13,1110 (2) Income tax deferral. The treatment of section 71.05 (24) of the statutes
11first applies to taxable years beginning on January 1, 2006.
SB261, s. 17 12Section 17. Effective dates. This act takes effect on July 1, 2004, except as
13follows:
SB261,13,1414 (1) Rules. Section 15 (1) of this act takes effect on the day after publication.
SB261,13,1515 (End)
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