LRBs0084/1
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2005 - 2006 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO 2005 SENATE BILL 103
April 13, 2005 - Offered by Senator Kanavas.
SB103-SSA1,1,6
1An Act to renumber and amend 71.28 (4) (a), 71.28 (5) (a), 71.47 (4) (a) and
271.47 (5) (a);
to amend 71.28 (4) (am) 1. and 71.47 (4) (am); and
to create 71.28
3(4) (ab), 71.28 (4) (ad) 2., 71.28 (4) (af), 71.28 (5) (ab), 71.28 (5) (ad) 2., 71.47 (4)
4(ab), 71.47 (4) (ad) 2., 71.47 (4) (af), 71.47 (5) (ab) and 71.47 (5) (ad) 2. of the
5statutes;
relating to: the income and franchise tax credit for research and
6research facilities.
Analysis by the Legislative Reference Bureau
Under current law, a corporation may claim an income and franchise tax credit
in an amount equal to 5 percent of its qualified research expenses, as defined by the
Internal Revenue Code for research conducted in this state. In addition, a
corporation may claim an income and franchise tax credit equal to 5 percent of the
amount it paid in the taxable year to construct and equip new facilities or expand
existing facilities used in this state for qualified research, as defined by the Internal
Revenue Code. Under this substitute amendment, a corporation may claim an
income and franchise tax credit in an amount equal to 10 percent of its qualified
research expenses related to engine and vehicle design for research conducted in this
state and 10 percent of the amount it paid in the taxable year to construct and equip
new facilities or expand existing facilities used in this state for qualified research
related to designing internal combustion engines, including expenses related to
designing vehicles that are powered by such engines.
For further information see the state 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:
SB103-SSA1, s. 1
1Section
1. 71.28 (4) (a) of the statutes is renumbered 71.28 (4) (ad) 1. and
2amended to read:
SB103-SSA1,2,183
71.28
(4) (ad)
Credit. 1.
Any Except as provided in subd. 2., any corporation
4may credit against taxes otherwise due under this chapter an amount equal to
5% 55 percent of the amount obtained by subtracting from the corporation's qualified
6research expenses, as defined in section
41 of the
internal revenue code Internal
7Revenue Code, except that "qualified research expenses" includes only expenses
8incurred by the claimant, incurred for research conducted in this state for the taxable
9year, except that a taxpayer may elect the alternative computation under section
41 10(c) (4) of the Internal Revenue Code and that election applies until the department
11permits its revocation
, except as provided in par. (af), and except that "qualified
12research expenses" does not include compensation used in computing the credit
13under subs. (1dj) and (1dx), the corporation's base amount, as defined in section
41 14(c) of the
internal revenue code Internal Revenue Code, except that gross receipts
15used in calculating the base amount means gross receipts from sales attributable to
16Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d). Section
41 (h) of the
internal
17revenue code Internal Revenue Code does not apply to the credit under this
18paragraph.
SB103-SSA1, s. 2
19Section
2. 71.28 (4) (ab) of the statutes is created to read:
SB103-SSA1,2,2020
71.28
(4) (ab)
Definitions. In this subsection:
SB103-SSA1,3,1
11. "Frame" includes:
SB103-SSA1,3,22
a. Every part of a motorcycle, except the tires.
SB103-SSA1,3,43
b. In the case of a truck, the control system and the fuel and drive train,
4excluding any comfort features located in the cab or the tires.
SB103-SSA1,3,75
c. In the case of a generator, the control modules, fuel train, fuel scrubbing
6process, fuel mixers, generator, heat exchangers, exhaust train, and similar
7components.
SB103-SSA1,3,118
2. "Vehicle" means any vehicle or frame in which or on which an engine is
9mounted for use in mobile or stationary applications. "Vehicle" includes any truck,
10tractor, motorcycle, snowmobile, all-terrain vehicle, boat, personal watercraft,
11generator, automobile, van, sports utility vehicle, motor home, bus, or aircraft.
SB103-SSA1, s. 3
12Section
3. 71.28 (4) (ad) 2. of the statutes is created to read:
SB103-SSA1,4,413
71.28
(4) (ad) 2. For taxable years beginning after December 31, 2006, any
14corporation may credit against taxes otherwise due under this chapter an amount
15equal to 10 percent of the amount obtained by subtracting from the corporation's
16qualified research expenses, as defined in section
41 of the Internal Revenue Code,
17except that "qualified research expenses" includes only expenses incurred by the
18claimant for research related to designing internal combustion engines for vehicles,
19including expenses related to designing vehicles that are powered by such engines
20and improving production processes for such engines and vehicles, incurred for
21research conducted in this state for the taxable year, except that a taxpayer may elect
22the alternative computation under section
41 (c) (4) of the Internal Revenue Code
23and that election applies until the department permits its revocation, except as
24provided in par. (af), and except that "qualified research expenses" does not include
25compensation used in computing the credit under subs. (1dj) and (1dx), the
1corporation's base amount, as defined in section
41 (c) of the Internal Revenue Code,
2except that gross receipts used in calculating the base amount means gross receipts
3from sales attributable to Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d). Section
441 (h) of the Internal Revenue Code does not apply to the credit under this paragraph.
SB103-SSA1,4,96
71.28
(4) (af)
Computation. If in any taxable year a corporation claims a credit
7under both par. (ad) 1. and 2., the corporation may use a different computation
8method under par. (ad) 2. than it uses under par. (ad) 1. and may choose to change
9the computation method once for each credit without the department's approval.
SB103-SSA1, s. 5
10Section
5. 71.28 (4) (am) 1. of the statutes is amended to read:
SB103-SSA1,5,1011
71.28
(4) (am) 1. In addition to the credit under par.
(a) (ad), any corporation
12may credit against taxes otherwise due under this chapter an amount equal to
5% 135 percent of the amount obtained by subtracting from the corporation's qualified
14research expenses, as defined in section
41 of the
internal revenue code Internal
15Revenue Code, except that "qualified research expenses" include only expenses
16incurred by the claimant in a development zone under subch. VI of ch. 560, except
17that a taxpayer may elect the alternative computation under section
41 (c) (4) of the
18Internal Revenue Code and that election applies until the department permits its
19revocation and except that "qualified research expenses" do not include
20compensation used in computing the credit under sub. (1dj) nor research expenses
21incurred before the claimant is certified for tax benefits under s. 560.765 (3), the
22corporation's base amount, as defined in section
41 (c) of the
internal revenue code 23Internal Revenue Code, in a development zone, except that gross receipts used in
24calculating the base amount means gross receipts from sales attributable to
25Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d) and research expenses used in
1calculating the base amount include research expenses incurred before the claimant
2is certified for tax benefits under s. 560.765 (3), in a development zone, if the claimant
3submits with the claimant's return a copy of the claimant's certification for tax
4benefits under s. 560.765 (3) and a statement from the department of commerce
5verifying the claimant's qualified research expenses for research conducted
6exclusively in a development zone. The rules under s. 73.03 (35) apply to the credit
7under this subdivision. The rules under sub. (1di) (f) and (g) as they apply to the
8credit under that subsection apply to claims under this subdivision. Section
41 (h)
9of the
internal revenue code Internal Revenue Code does not apply to the credit under
10this subdivision.
SB103-SSA1, s. 6
11Section
6. 71.28 (5) (a) of the statutes is renumbered 71.28 (5) (ad) 1. and
12amended to read:
SB103-SSA1,5,2013
71.28
(5) (ad)
Credit. 1.
For Except as provided in subd. 2., for taxable year
141986 and subsequent years, any corporation may credit against taxes otherwise due
15under this chapter an amount equal to
5% 5 percent of the amount paid or incurred
16by that corporation during the taxable year to construct and equip new facilities or
17expand existing facilities used in this state for qualified research, as defined in
18section
41 of the
internal revenue code Internal Revenue Code. Eligible amounts
19include only amounts paid or incurred for tangible, depreciable property but do not
20include amounts paid or incurred for replacement property.
SB103-SSA1, s. 7
21Section
7. 71.28 (5) (ab) of the statutes is created to read:
SB103-SSA1,5,2222
71.28
(5) (ab)
Definitions. In this subsection:
SB103-SSA1,5,2323
1. "Frame" includes:
SB103-SSA1,5,2424
a. Every part of a motorcycle, except the tires.
SB103-SSA1,6,2
1b. In the case of a truck, the control system and the fuel and drive train,
2excluding any comfort features located in the cab or the tires.
SB103-SSA1,6,53
c. In the case of a generator, the control modules, fuel train, fuel scrubbing
4process, fuel mixers, generator, heat exchangers, exhaust train, and similar
5components.
SB103-SSA1,6,96
2. "Vehicle" means any vehicle or frame in which or on which an engine is
7mounted for use in mobile or stationary applications. "Vehicle" includes any truck,
8tractor, motorcycle, snowmobile, all-terrain vehicle, boat, personal watercraft,
9generator, automobile, van, sports utility vehicle, motor home, bus, or aircraft.
SB103-SSA1, s. 8
10Section
8. 71.28 (5) (ad) 2. of the statutes is created to read:
SB103-SSA1,6,2211
71.28
(5) (ad) 2. For taxable years beginning after December 31, 2006, any
12corporation may credit against taxes otherwise due under this chapter an amount
13equal to 10 percent of the amount paid or incurred by that corporation during the
14taxable year to construct and equip new facilities or expand existing facilities used
15in this state for qualified research, as defined in section
41 of the Internal Revenue
16Code, except that "qualified research expenses" includes only expenses paid or
17incurred by the claimant for research related to designing internal combustion
18engines for vehicles, including expenses related to designing vehicles that are
19powered by such engines and improving production processes for such engines and
20vehicles. Eligible amounts include only amounts paid or incurred for tangible,
21depreciable property but do not include amounts paid or incurred for replacement
22property.
SB103-SSA1, s. 9
23Section
9. 71.47 (4) (a) of the statutes is renumbered 71.47 (4) (ad) 1. and
24amended to read:
SB103-SSA1,7,16
171.47
(4) (ad)
Credit. 1.
Any Except as provided in subd. 2., any corporation
2may credit against taxes otherwise due under this chapter an amount equal to
5% 310 percent of the amount obtained by subtracting from the corporation's qualified
4research expenses, as defined in section
41 of the
internal revenue code Internal
5Revenue Code, except that "qualified research expenses" includes only expenses
6incurred by the claimant, incurred for research conducted in this state for the taxable
7year, except that a taxpayer may elect the alternative computation under section
41 8(c) (4) of the Internal Revenue Code and that election applies until the department
9permits its revocation
, except as provided in par. (af), and except that "qualified
10research expenses" does not include compensation used in computing the credit
11under subs. (1dj) and (1dx), the corporation's base amount, as defined in section
41 12(c) of the
internal revenue code Internal Revenue Code, except that gross receipts
13used in calculating the base amount means gross receipts from sales attributable to
14Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d). Section
41 (h) of the
internal
15revenue code Internal Revenue Code does not apply to the credit under this
16paragraph.
SB103-SSA1,7,1818
71.47
(4) (ab)
Definitions. In this subsection:
SB103-SSA1,7,1919
1. "Frame" includes:
SB103-SSA1,7,2020
a. Every part of a motorcycle, except the tires.
SB103-SSA1,7,2221
b. In the case of a truck, the control system and the fuel and drive train,
22excluding any comfort features located in the cab or the tires.
SB103-SSA1,7,2523
c. In the case of a generator, the control modules, fuel train, fuel scrubbing
24process, fuel mixers, generator, heat exchangers, exhaust train, and similar
25components.
SB103-SSA1,8,4
12. "Vehicle" means any vehicle or frame in which or on which an engine is
2mounted for use in mobile or stationary applications. "Vehicle" includes any truck,
3tractor, motorcycle, snowmobile, all-terrain vehicle, boat, personal watercraft,
4generator, automobile, van, sports utility vehicle, motor home, bus, or aircraft.
SB103-SSA1,8,226
71.47
(4) (ad) 2. For taxable years beginning after December 31, 2006, any
7corporation may credit against taxes otherwise due under this chapter an amount
8equal to 10 percent of the amount obtained by subtracting from the corporation's
9qualified research expenses, as defined in section
41 of the Internal Revenue Code,
10except that "qualified research expenses" includes only expenses incurred by the
11claimant for research related to designing internal combustion engines for vehicles,
12including expenses related to designing vehicles that are powered by such engines
13and improving production processes for such engines and vehicles, incurred for
14research conducted in this state for the taxable year, except that a taxpayer may elect
15the alternative computation under section
41 (c) (4) of the Internal Revenue Code
16and that election applies until the department permits its revocation, except as
17provided in par. (af), and except that "qualified research expenses" does not include
18compensation used in computing the credit under subs. (1dj) and (1dx), the
19corporation's base amount, as defined in section
41 (c) of the Internal Revenue Code,
20except that gross receipts used in calculating the base amount means gross receipts
21from sales attributable to Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d). Section
2241 (h) of the Internal Revenue Code does not apply to the credit under this paragraph.
SB103-SSA1,9,224
71.47
(4) (af)
Computation. If in any taxable year a corporation claims a credit
25under both par. (ad) 1. and 2., the corporation may use a different computation
1method under par. (ad) 2. than it uses under par. (ad) 1. and may choose to change
2the computation method once for each credit without the department's approval.
SB103-SSA1,9,254
71.47
(4) (am)
Development zone additional research credit. In addition to the
5credit under par.
(a) (ad), any corporation may credit against taxes otherwise due
6under this chapter an amount equal to
5% 5 percent of the amount obtained by
7subtracting from the corporation's qualified research expenses, as defined in section
841 of the
internal revenue code Internal Revenue Code, except that "qualified
9research expenses" include only expenses incurred by the claimant in a development
10zone under subch. VI of ch. 560, except that a taxpayer may elect the alternative
11computation under section
41 (c) (4) of the Internal Revenue Code and that election
12applies until the department permits its revocation and except that "qualified
13research expenses" do not include compensation used in computing the credit under
14sub. (1dj) nor research expenses incurred before the claimant is certified for tax
15benefits under s. 560.765 (3), the corporation's base amount, as defined in section
41 16(c) of the
internal revenue code Internal Revenue Code, in a development zone,
17except that gross receipts used in calculating the base amount means gross receipts
18from sales attributable to Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d) and
19research expenses used in calculating the base amount include research expenses
20incurred before the claimant is certified for tax benefits under s. 560.765 (3), in a
21development zone, if the claimant submits with the claimant's return a copy of the
22claimant's certification for tax benefits under s. 560.765 (3) and a statement from the
23department of commerce verifying the claimant's qualified research expenses for
24research conducted exclusively in a development zone. The rules under s. 73.03 (35)
25apply to the credit under this paragraph. The rules under sub. (1di) (f) and (g) as they
1apply to the credit under that subsection apply to claims under this paragraph.
2Section
41 (h) of the
internal revenue code Internal Revenue Code does not apply to
3the credit under this paragraph. No credit may be claimed under this paragraph for
4taxable years that begin on January 1, 1998, or thereafter. Credits under this
5paragraph for taxable years that begin before January 1, 1998, may be carried
6forward to taxable years that begin on January 1, 1998, or thereafter.