AN ACT ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
taxation
Income taxation
This bill makes technical corrections to the film production services and film production company investment income and franchise tax credits in order to simplify the administration of the credits.
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:
SECTION 1. 71.07 (5h) (a) 4. of the statutes is amended to read:
71.07 (5h) (a) 4. "Previously owned property" means real property that the claimant or a related person owned during the 2 years prior to doing business in this state as a film production company and for which the claimant may not deduct a loss from the sale of the property to, or an exchange of the property with, the related person under section 267 of the Internal Revenue Code, except that section 267 of the Internal Revenue Code is modified so that if the claimant owns any part of the property, rather than 50 percent ownership, the claimant is subject to section 267 of the Internal Revenue Code for purposes of this subsection.
SECTION 2. 71.07 (5h) (c) 2. of the statutes is amended to read:
71.07 (5h) (c) 2. A claimant may claim the credit under par. (b) 2. for an amount expended to construct, rehabilitate, remodel, or repair real property, if the claimant began the physical work of construction, rehabilitation, remodeling, or repair, or any demolition or destruction in preparation for the physical work, after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.
SECTION 3. 71.07 (5h) (c) 3. of the statutes is amended to read:
71.07 (5h) (c) 3. A claimant may claim the credit under par. (b) 2. for an amount expended to acquire real property, if the property is not previously owned property and if the claimant acquires the property after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.
SECTION 4. 71.28 (5h) (a) 4. of the statutes is amended to read:
71.28 (5h) (a) 4. "Previously owned property" means real property that the claimant or a related person owned during the 2 years prior to doing business in this state as a film production company and for which the claimant may not deduct a loss from the sale of the property to, or an exchange of the property with, the related person under section 267 of the Internal Revenue Code, except that section 267 of the Internal Revenue Code is modified so that if the claimant owns any part of the property, rather than 50 percent ownership, the claimant is subject to section 267 of the Internal Revenue Code for purposes of this subsection.
SECTION 5. 71.28 (5h) (c) 2. of the statutes is amended to read:
71.28 (5h) (c) 2. A claimant may claim the credit under par. (b) 2. for an amount expended to construct, rehabilitate, remodel, or repair real property, if the claimant began the physical work of construction, rehabilitation, remodeling, or repair, or any demolition or destruction in preparation for the physical work, after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.
SECTION 6. 71.28 (5h) (c) 3. of the statutes is amended to read:
71.28 (5h) (c) 3. A claimant may claim the credit under par. (b) 2. for an amount expended to acquire real property, if the property is not previously owned property and if the claimant acquires the property after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.
SECTION 7. 71.30 (3) (epp) of the statutes is renumbered 71.30 (3) (eps) and amended to read:
71.30 (3) (eps) Film production services credit under s. 71.28 (5f) (b) 1. and 3.
SECTION 8. 71.30 (3) (f) of the statutes is amended to read:
71.30 (3) (f) The total of farmers' drought property tax credit under s. 71.28 (1fd), farmland preservation credit under subch. IX, farmland tax relief credit under s. 71.28 (2m), enterprise zone jobs credit under s. 71.28 (3w), film production services credit under s. 71.28 (5f) (b) 2., and estimated tax payments under s. 71.29.
SECTION 9. 71.47 (5h) (a) 4. of the statutes is amended to read:
71.47 (5h) (a) 4. "Previously owned property" means real property that the claimant or a related person owned during the 2 years prior to doing business in this state as a film production company and for which the claimant may not deduct a loss from the sale of the property to, or an exchange of the property with, the related person under section 267 of the Internal Revenue Code, except that section 267 of the Internal Revenue Code is modified so that if the claimant owns any part of the property, rather than 50 percent ownership, the claimant is subject to section 267 of the Internal Revenue Code for purposes of this subsection.
SECTION 10. 71.47 (5h) (c) 2. of the statutes is amended to read:
71.47 (5h) (c) 2. A claimant may claim the credit under par. (b) 2. for an amount expended to construct, rehabilitate, remodel, or repair real property, if the claimant began the physical work of construction, rehabilitation, remodeling, or repair, or any demolition or destruction in preparation for the physical work, after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.
SECTION 11. 71.47 (5h) (c) 3. of the statutes is amended to read:
71.47 (5h) (c) 3. A claimant may claim the credit under par. (b) 2. for an amount expended to acquire real property, if the property is not previously owned property and if the claimant acquires the property after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.
SECTION 12. 71.49 (1) (epp) of the statutes is renumbered 71.49 (1) (eps) and amended to read:
71.49 (1) (eps) Film production services credit under s. 71.47 (5f) (b) 1. and 3.
SECTION 13. 71.49 (1) (f) of the statutes is amended to read:
71.49 (1) (f) The total of farmers' drought property tax credit under s. 71.47 (1fd), farmland preservation credit under subch. IX, farmland tax relief credit under s. 71.47 (2m), enterprise zone jobs credit under s. 71.47 (3w), film production services credit under s. 71.28 (5f) (b) 2., and estimated tax payments under s. 71.48.
(End)
LRB-0721LRB-0721/2
JK:kjf:rs
2007 - 2008 LEGISLATURE
DOA:......Easton, BB0161 - Pass-through entities withholdings simplification
For 2007-09 Budget -- Not Ready For Introduction
2007 BILL
AN ACT ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
taxation
Income taxation
Under current law, a partnership, a limited liability company, a tax-option corporation, an estate, or a trust that is treated as a pass-through entity for federal income tax purposes must withhold income or franchise taxes from the income that the entity may distribute to a nonresident partner, member, shareholder, or beneficiary. However, a nonresident partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state is not included in determining the amount of the withholding tax if the partner, member, shareholder, or beneficiary is exempt from state income and franchise taxes or if the partner, member, shareholder, or beneficiary has no state income other than his or her share of income from the pass-through entity that is attributable to this state and the amount of that income is less than $1,000. Under this bill, income excluded from determining the amount of a pass-through entity's withholding taxes includes income of a nonresident partner, member, shareholder, or beneficiary who files an affidavit with DOR, whereby the nonresident partner, member, shareholder, or beneficiary agrees to file a state income or franchise tax return and be subject to the personal jurisdiction of DOR, the Tax Appeals Commission, and the courts of this state for the purpose of determining and collecting state income and franchise taxes.
Current law imposes interest on certain underpayments of estimated withholding taxes imposed on pass-through entities and on late payments of withholding taxes imposed on pass-through entities. This bill eliminates the provision related to imposing interest on the underpayments of estimated withholding taxes imposed on pass-through entities.
This bill will be referred to the Joint Survey Committee on Tax Exemptions for a detailed analysis, which will be printed as an appendix to this bill.
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:
SECTION 1. 71.775 (3) (a) 2. of the statutes is amended to read:
71.775 (3) (a) 2. The partner, member, shareholder, or beneficiary has no Wisconsin income other than his or her partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state and his or her share of such income is less than $1,000.
SECTION 2. 71.775 (3) (a) 3. of the statutes is created to read:
71.775 (3) (a) 3. The nonresident partner, member, shareholder, or beneficiary files an affidavit with the department, in the form and manner prescribed by the department, whereby the nonresident partner, member, shareholder, or beneficiary agrees to file a Wisconsin income or franchise tax return and be subject to the personal jurisdiction of the department, the tax appeals commission, and the courts of this state for the purpose of determining and collecting Wisconsin income and franchise taxes, including estimated tax payments, together with any related interest and penalties.
SECTION 3. 71.775 (4) (b) 2. of the statutes is amended to read:
71.775 (4) (b) 2. A pass-through entity that pays the tax withheld under sub. (2) as provided under subd. 1. is not subject to an underpayment of estimated tax under s. 71.09 or 71.29, if 90 percent of the tax that is due for the current taxable year is paid by the unextended due date or if 100 percent of the tax that is due for the taxable year immediately preceding the current taxable year is paid by the unextended due date and the taxable year immediately preceding the current taxable year was a 12-month period. Interest at the rate of 12 percent shall be imposed on the unpaid amount of the tax withheld due under sub. (2) during any extension period and interest at the rate of 18 percent shall be imposed on the unpaid amount of the tax withheld due under sub. (2) for the period beginning with the extended due date and ending with the date that the unpaid amount is paid in full.
SECTION 4. 71.775 (4) (d) of the statutes is amended to read:
71.775 (4) (d) A nonresident partner, member, shareholder, or beneficiary of a pass-through entity may claim a credit, as prescribed by the department, on his or her Wisconsin income or franchise tax return for the amount withheld under sub. (2) on his or her behalf for the tax period for which the income of the pass-through entity is reported. For purposes of this paragraph determining whether interest under s. 71.84 applies to a nonresident partner, member, shareholder, or beneficiary, the amount withheld under sub. (2) is considered to be paid on the last day of the pass-through entity's taxable year for which the tax is paid in 4 equal quarterly installments.
SECTION 5. 71.775 (4) (f) of the statutes is amended to read:
71.775 (4) (f) If a pass-through entity subject to withholding under this section fails to withhold pay the tax as required by this section, the pass-through entity shall be liable for any tax, interest, and penalties. If a nonresident partner, member, shareholder, or beneficiary of the pass-through entity files a return and pays the tax due, the pass-through entity shall not be liable for the tax, but shall be liable for any interest and penalties otherwise applicable for failure to withhold, as the penalty provided under ss. 71.82 (2) (d) and s. 71.83 (1) (a) 1.
SECTION 6. 71.83 (1) (a) 1. of the statutes is amended to read:
71.83 (1) (a) 1. 'Failure to file.' In case of failure to file any return required under s. 71.03, 71.24 or, 71.44, or 71.775 on the due date prescribed therefor, including any applicable extension of time for filing, unless it is shown that the failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on the return 5% of the amount of the tax if the failure is for not more than one month, with an additional 5% for each additional month or fraction thereof during which the failure continues, not exceeding 25% in the aggregate. For purposes of this subdivision, the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the due date prescribed for payment and by the amount of any credit against the tax which may be claimed upon the return.
SECTION 9341. Initial applicability; Revenue.
(1) WITHHOLDING TAX ON NONRESIDENT MEMBERS OF PASS-THROUGH ENTITIES. The treatment of sections 71.775 (3) (a) 2. and 3. and (4) (b) 2., (d), and (f), and 71.83 (1) (a) 1. of the statutes first applies retroactively to taxable years beginning on January 1, 2006.
SECTION 9441. Effective dates; Revenue.
(1) WITHHOLDING TAX ON NONRESIDENT MEMBERS OF PASS-THROUGH ENTITIES. The treatment of sections 71.775 (3) (a) 2. and 3. and (4) (b) 2., (d), and (f), and 71.83 (1) (a) 1. of the statutes takes effect retroactively on January 1, 2006.
(End)
LRB-0722LRB-0722/2
JK:kjf:rs
2007 - 2008 LEGISLATURE
DOA:......Easton, BB0162 - Changes to enterprise zone jobs credits
For 2007-09 Budget -- Not Ready For Introduction
2007 BILL
AN ACT ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
taxation
Income taxation
This bill makes technical corrections to the enterprise zone jobs income and franchise tax credits in order to simplify the administration of the credits.
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:
SECTION 1. 71.07 (3w) (a) 5m. of the statutes is created to read:
71.07 (3w) (a) 5m. "Wages" means wages under section 3306 (b) of the Internal Revenue Code, determined without regard to any dollar limitations.
SECTION 2. 71.07 (3w) (a) 6. of the statutes is amended to read:
71.07 (3w) (a) 6. "Zone payroll" means the amount of state payroll that is attributable to compensation wages paid to individuals full-time employees for services that are performed in a an enterprise zone. "Zone payroll" does not include the amount of compensation wages paid to any individuals full-time employees that exceeds $100,000.
SECTION 3. 71.07 (3w) (b) 1. a. of the statutes is amended to read:
71.07 (3w) (b) 1. a. The claimant's zone payroll in the taxable year, minus the claimant's zone payroll number of full-time employees whose annual wages are greater than $30,000 and who the claimant employed in the enterprise zone in the taxable year, minus the number of full-time employees whose annual wages were greater than $30,000 and who the claimant employed in the area that comprises the enterprise zone in the base year.
SECTION 4. 71.07 (3w) (b) 1. b. of the statutes is amended to read:
71.07 (3w) (b) 1. b. The claimant's state payroll in the taxable year, minus the claimant's state payroll number of full-time employees whose annual wages are greater than $30,000 and who the claimant employed in the state in the taxable year, minus the number of full-time employees whose annual wages were greater than $30,000 and who the claimant employed in the state in the base year.
SECTION 5. 71.07 (3w) (b) 2. of the statutes is amended to read:
71.07 (3w) (b) 2. Subtract the number of Determine the claimant's average zone payroll by dividing total wages for full-time employees that whose annual wages are greater than $30,000 and who the claimant employed in the area that comprises the enterprise zone in the base taxable year from by the number of full-time employees that whose annual wages are greater than $30,000 and who the claimant employed in the enterprise zone in the taxable year.
SECTION 6. 71.07 (3w) (b) 3. of the statutes is amended to read:
71.07 (3w) (b) 3. Multiply Subtract $30,000 from the amount determined under subd. 2., but not an amount less than zero, by $30,000.
SECTION 7. 71.07 (3w) (b) 4. of the statutes is amended to read:
71.07 (3w) (b) 4. Subtract Multiply the amount determined under subd. 3. from by the amount determined under subd. 1.