AB1177: Bill Text

Amount of tax credits

As noted above, the bill creates tax credits for certain investments. For taxable years beginning after December 31, 2005, a taxpayer may claim as a tax credit, in each taxable year for four years, 15 percent of the initial amount that the taxpayer invests as an angel investor in a business certified by the board to receive such investments. The maximum amount of the tax credits that may be awarded for angel investments for all taxable years combined is $25,000,000.

For taxable years beginning after December 31, 2005, a taxpayer may claim as a tax credit, in each taxable year for six years, any of the following amounts invested in a business that is certified by the board to receive such investments: 1) 10 percent of the taxpayer's initial investment paid to a fund manager that the fund manager invests as an early stage seed investment; 2) 7 percent of the taxpayer's initial investment paid to a fund manager that the fund manager invests as a venture growth investment; and 3) 10 percent of the taxpayer's initial investment paid to a fund manager that the fund manager invests as a women-, minority-, and community-based investment. For early stage seed investments, the maximum amount of the tax credits that may be awarded for all taxable years combined is $70,000,000; for venture growth investments, the maximum amount of the tax credits that may be awarded for all taxable years combined is $42,000,000; and, for women-, minority-, and community-based investments, the maximum amount of the tax credits that may be awarded for all taxable years combined is $10,000,000. In addition, the maximum amount invested by an individual that may be used as the basis for a tax credit is $500,000 for each investment that is made directly or indirectly in a business that is certified to receive angel investments, early stage seed investments, or women-, minority-, and community-based investments.

The bill also creates an income and franchise tax credit that allows a Native American tribe that has entered into a gaming compact with this state to claim a tax credit equal to the amount of gaming compact fees the tribe pays to the state, not to exceed $10,000,000 in any taxable year. To receive the credit the tribe must make an investment in a business certified by the board.

Finally, for taxable years beginning after December 31, 2005, a taxpayer who is a broker-dealer or a finder may claim a tax credit in an amount equal to 10 percent of the first $500,000 raised in the taxable year in an offering of a business that is certified by the board to receive early stage seed investments. The maximum amount of such tax credits that may awarded for all taxable years combined is $3,000,000.

Tribal gaming compact investment rebates

This bill also creates a tribal gaming compact investment rebate program. The program requires the Department of Commerce to make an annual rebate to an Indian tribe in an amount equal to 5 percent of the tribe's gaming revenue payments to the state. Under the bill, the tribe must agree to use the rebate to invest in a fund established by the CICP. The bill imposes an annual cap on the rebates of $10,000,000 per tribe and $100,000,000 for all tribes.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1177, s. 1 Section 1. 15.155 (6) of the statutes is created to read:

AB1177,5,14 15.155 (6) Wisconsin economic leadership board. There is created a Wisconsin economic leadership board attached to the department of commerce under s. 15.03. The board shall consist of 7 members. One member shall be the governor. Two members, one of whom shall represent the interests of federally recognized American Indian tribes and bands in this state, shall be appointed for one-year terms by the governor. One member shall be the majority leader or minority leader of the senate, whichever is a member of a political party other than the party of which the governor is a member. Notwithstanding s. 15.07 (1) (b), one member shall be appointed for a one-year term by the speaker or minority leader of the assembly, whichever is a member of a political party other than the party of which the governor is a member. One member shall be the executive director of the investment board. One member shall be the chairperson of the board of the capital investment corporation or partnership described in s. 560.20 (1) (c).

AB1177, s. 2 Section 2. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

AB1177, s. 3 Section 3. 20.143 (1) (kn) of the statutes is created to read:

AB1177,6,7 20.143 (1) (kn) Tribal gaming compact investment rebates. The amounts in the schedule for tribal gaming compact investment rebates under s. 560.203. All moneys transferred from the appropriation account under s. 20.505 (8) (hm) 6n. shall be credited to this appropriation account. Notwithstanding s. 20.001 (3) (a), the unencumbered balance on June 30 of each year shall revert to the appropriation account under s. 20.505 (8) (hm).

AB1177, s. 4 Section 4. 20.505 (8) (hm) 6n. of the statutes is created to read:

AB1177,6,11 20.505 (8) (hm) 6n. The amount transferred to s. 20.143 (1) (kn) shall be the sum of the amounts calculated by the department of commerce under s. 560.203 (2) (a).

AB1177, s. 5 Section 5. 25.17 (3) (h) of the statutes is created to read:

AB1177,6,15 25.17 (3) (h) Make an effort to invest at least $100,000,000 with fund managers, as defined in s. 560.20 (1) (e). In making any investment under this paragraph, the board is subject to the standard of responsibility under s. 25.15 (2).

AB1177, s. 6 Section 6. 71.05 (6) (a) 15. of the statutes is amended to read:

AB1177,7,2 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2r), (2s), (3g), (3n), (3s), (3t), (5b), and (5d) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).

AB1177, s. 7 Section 7. 71.07 (2r) of the statutes is created to read:

AB1177,7,5 71.07 (2r) Venture capital investment credits. (a) Definitions. In this subsection:

AB1177,7,6 1. "Broker-dealer" has the meaning given in s. 551.02 (3).

AB1177,7,7 2. "Claimant" means a person who files a claim under this subsection.

AB1177,7,8 3. "Fund manager" has the meaning given in s. 560.20 (1) (e).

AB1177,7,14 (b) Filing claims. For taxable years beginning on or after January 1, 2006, for amounts claimed under subd. 2., and beginning on or after January 1, 2007, for amounts claimed under subds. 1., 3., and 4., subject to the limitations provided under this subsection and ss. 73.03 (35p) and 560.20, a claimant may claim as a credit against the tax imposed under ss. 71.02 and 71.08, up to the amount of those taxes, any of the following amounts:

AB1177,7,18 1. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as an early stage seed investment, in a business certified under s. 560.20 (2) (b).

AB1177,7,22 2. In each taxable year for 4 years, beginning with the taxable year in which the claimant's initial investment is made, 15 percent of the claimant's initial investment that the claimant invests, as an angel investment, in a business certified under s. 560.20 (2) (e).

AB1177,8,2 3. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 7 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a venture growth investment, in a business certified under s. 560.20 (2) (c).

AB1177,8,7 4. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a women-, minority-, and community-based investment, in a business certified under s. 560.20 (2) (d).

AB1177,8,13 (bm) Filing claims; broker-dealer and finder. For taxable years beginning on or after January 1, 2006, subject to the limitations provided under this subsection and s. 560.20, a claimant who is a broker-dealer or a finder may claim as a credit against the tax imposed under ss. 71.02 and 71.08, up to the amount of those taxes, an amount equal to 10 percent of the first $500,000 raised in the taxable year in an offering of a business certified under s. 560.20 (2) (b).

AB1177,8,16 (c) Limitations. 1. a. The maximum amount of the credits that may be claimed under par. (b) 1. and ss. 71.28 (2r) (b) 1. and 71.47 (2r) (b) 1. for all taxable years combined is $70,000,000.

AB1177,8,19 b. The maximum amount of the credits that may be claimed under par. (b) 2. and ss. 71.28 (2r) (b) 2. and 71.47 (2r) (b) 2. for all taxable years combined is $25,000,000.

AB1177,8,22 c. The maximum amount of the credits that may be claimed under par. (b) 3. and ss. 71.28 (2r) (b) 3. and 71.47 (2r) (b) 3. for all taxable years combined is $42,000,000.

AB1177,8,25 d. The maximum amount of the credits that may be claimed under par. (b) 4. and ss. 71.28 (2r) (b) 4. and 71.47 (2r) (b) 4. for all taxable years combined is $10,000,000.

AB1177,9,3 e. The maximum amount of the credits that may be claimed under par. (bm) and ss. 71.28 (2r) (bm) and 71.47 (2r) (bm) for all taxable years combined is $3,000,000.

AB1177,9,7 2. The maximum amount of an investment that a claimant who is an individual may make that may be used as the basis for a credit under this subsection is $500,000 for each investment made directly or indirectly in a business certified under s. 560.20 (2) (b), (d), and (e).

AB1177,9,15 3. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under par. (b), but the eligibility for, and the amount of, the credit are based on their payment of amounts 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 or as specially allocated in their organizational documents.

AB1177,9,17 (d) Administration. 1. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB1177,9,21 2. A claimant may sell a credit under this subsection to another person who is subject to the taxes imposed under this subchapter, if the claimant notifies the department of the sale and includes with the notification a copy of the transfer documents.

AB1177, s. 8 Section 8. 71.07 (2s) of the statutes is created to read:

AB1177,9,25 71.07 (2s) Tribal gaming compact credit. (a) Definition. In this subsection, "claimant" means a Native American tribe that is located in this state, has entered into a gaming compact with this state, and files a claim under this subsection.

AB1177,10,5 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2005, a claimant may claim as a credit against the tax imposed under ss. 71.02 and 71.08, up to the amount of the taxes, an amount equal to the amount the claimant paid in the taxable year to the state pursuant to a gaming compact, not to exceed $10,000,000 in any taxable year.

AB1177,10,8 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant, in the taxable year, invests in a business this is certified to receive investments under s. 560.20 (2).

AB1177,10,10 2. No credit may be allowed under this subsection unless the claimant submits with the claimant's return proof of the investment described under subd. 1.

AB1177,10,13 3. The maximum amount of the credit that may be awarded under this subsection and ss. 71.28 (2s) and 71.47 (2s) for all claimants in each taxable year may not exceed $100,000,000.

AB1177,10,21 4. 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 amounts 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 interests.

AB1177,10,23 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB1177, s. 9 Section 9. 71.10 (4) (gwd) of the statutes is created to read:

AB1177,10,25 71.10 (4) (gwd) Venture capital investment credits under s. 71.07 (2r).

AB1177, s. 10 Section 10. 71.10 (4) (gxx) of the statutes is created to read:

AB1177,11,2 71.10 (4) (gxx) Tribal gaming compact credit under s. 71.07 (2s).

AB1177, s. 11 Section 11. 71.21 (4) of the statutes is amended to read:

AB1177,11,6 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (2r), (2s), (3g), (3n), (3s), (3t), and (5b) and passed through to partners shall be added to the partnership's income.

AB1177, s. 12 Section 12. 71.26 (2) (a) of the statutes is amended to read:

AB1177,11,25 71.26 (2) (a) Corporations in general. The "net income" of a corporation means the gross income as computed under the Internal Revenue Code as modified under sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c) 7., the amount of the credit under s. 71.28 (3) that the taxpayer added to income under this paragraph at the time that the taxpayer first claimed the credit plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (2r), (2s), (3g), (3n), (3t), and (5b) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from the sale or other disposition of assets the gain from which would be wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and minus deductions, as computed under the Internal Revenue Code as modified under sub. (3), plus or minus, as appropriate, an amount equal to the difference between the federal basis and Wisconsin basis of any asset sold, exchanged, abandoned, or otherwise disposed of in a taxable transaction during the taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).

AB1177, s. 13 Section 13. 71.28 (2r) of the statutes is created to read:

AB1177,12,3 71.28 (2r) Venture capital investment credits. (a) Definitions. In this subsection:

AB1177,12,4 1. "Broker-dealer" has the meaning given in s. 551.02 (3).

AB1177,12,5 2. "Claimant" means a person who files a claim under this subsection.

AB1177,12,6 3. "Fund manager" has the meaning given in s. 560.20 (1) (e).

AB1177,12,12 (b) Filing claims. For taxable years beginning on or after January 1, 2006, for amounts claimed under subd. 2., and beginning on or after January 1, 2007, for amounts claimed under subds. 1., 3., and 4., subject to the limitations provided under this subsection and ss. 73.03 (35p) and 560.20, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, any of the following amounts:

AB1177,12,16 1. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as an early stage seed investment, in a business certified under s. 560.20 (2) (b).

AB1177,12,20 2. In each taxable year for 4 years, beginning with the taxable year in which the claimants initial investment is made, 15 percent of the claimant's initial investment that the claimant invests, as an angel investment, in a business certified under s. 560.20 (2) (e).

AB1177,12,24 3. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 7 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a venture growth investment, in a business certified under s. 560.20 (2) (c).

AB1177,13,5 4. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a women-, minority-, and community-based investment, in a business certified under s. 560.20 (2) (d).

AB1177,13,11 (bm) Filing claims; broker-dealer and finder. For taxable years beginning on or after January 1, 2006, subject to the limitations provided under this subsection and s. 560.20, a claimant who is a broker-dealer or a finder may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, an amount equal to 10 percent of the first $500,000 raised in the taxable year in an offering of a business certified under s. 560.20 (2) (b).

AB1177,13,14 (c) Limitations. 1. a. The maximum amount of the credits that may be claimed under par. (b) 1. and ss. 71.07 (2r) (b) 1. and 71.47 (2r) (b) 1. for all taxable years combined is $70,000,000.

AB1177,13,17 b. The maximum amount of the credits that may be claimed under par. (b) 2. and ss. 71.07 (2r) (b) 2. and 71.47 (2r) (b) 2. for all taxable years combined is $25,000,000.

AB1177,13,20 c. The maximum amount of the credits that may be claimed under par. (b) 3. and ss. 71.07 (2r) (b) 3. and 71.47 (2r) (b) 3. for all taxable years combined is $42,000,000.

AB1177,13,23 d. The maximum amount of the credits that may be claimed under par. (b) 4. and ss. 71.07 (2r) (b) 4. and 71.47 (2r) (b) 4. for all taxable years combined is $10,000,000.

AB1177,13,25 e. The maximum amount of the credit that may be claimed under par. (bm) and ss. 71.07 (2r) (bm) and 71.47 (2r) (bm) for all taxable years combined is $3,000,000.

AB1177,14,8 2. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under par. (b), but the eligibility for, and the amount of, the credit are based on their payment of amounts 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 or as specially allocated in their organizational documents.

AB1177,14,10 (d) Administration. 1. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB1177,14,14 2. A claimant may sell a credit under this subsection to another person who is subject to the taxes imposed under this subchapter, if the claimant notifies the department of the sale and includes with the notification a copy of the transfer documents.

AB1177, s. 14 Section 14. 71.28 (2s) of the statutes is created to read:

AB1177,14,18 71.28 (2s) Tribal gaming compact credit. (a) Definition. In this subsection, "claimant" means a Native American tribe that is located in this state, has entered into a gaming compact with this state, and files a claim under this subsection.

AB1177,14,23 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2005, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of the taxes, an amount equal to the amount the claimant paid in the taxable year to the state pursuant to a gaming compact, not to exceed $10,000,000 in any taxable year.

AB1177,15,3 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant, in the taxable year, invests in a business this is certified to receive investments under s. 560.20 (2).

AB1177,15,5 2. No credit may be allowed under this subsection unless the claimant submits with the claimant's return proof of the investment described under subd. 1.

AB1177,15,8 3. The maximum amount of the credit that may be awarded under this subsection and ss. 71.07 (2s) and 71.47 (2s) for all claimants in each taxable year may not exceed $100,000,000.

AB1177,15,16 4. 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 amounts 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 interests.

AB1177,15,18 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB1177, s. 15 Section 15. 71.30 (3) (eor) of the statutes is created to read:

AB1177,15,20 71.30 (3) (eor) Venture capital investment credits under s. 71.28 (2r).

AB1177, s. 16 Section 16. 71.30 (3) (eos) of the statutes is created to read:

AB1177,15,22 71.30 (3) (eos) Tribal gaming compact credit under s. 71.28 (2s).

AB1177, s. 17 Section 17. 71.34 (1) (g) of the statutes is amended to read:

AB1177,16,3 71.34 (1) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (2r), (2s), (3), (3g), (3n), (3t), and (5b) and passed through to shareholders.