71.04 (8) (a) 2. As used in this section, "financial organization" includes any subsidiary of an entity described in subd. 1., if a significant purpose for the subsidiary is to hold investments or if the subsidiary primarily functions to hold investments.
2,85
Section
85. 71.05 (6) (a) 15. of the statutes is amended to read:
71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p),
(3r), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), and (5k) 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 (1k) (g).
2,86
Section
86. 71.05 (6) (a) 24. of the statutes is amended to read:
71.05 (6) (a) 24. The amount deducted or excluded under the Internal Revenue Code for interest expenses and, rental expenses, intangible expenses, and management fees that are directly or indirectly paid, accrued, or incurred to, or in connection directly or indirectly with one or more direct or indirect transactions with, one or more related entities.
2,87
Section
87. 71.05 (6) (b) 46. of the statutes is amended to read:
71.05 (6) (b) 46. An amount added, pursuant to par. (a) 24. or s. 71.26 (2) (a) 7., 71.34 (1k) (j), or 71.45 (2) (a) 16., to the federal income of a related entity that paid interest expenses or, rental expenses
, intangible expenses, or management fees to the individual or fiduciary, to the extent that the related entity could not offset such amount with the deduction allowable under subd. 45. or s. 71.26 (2) (a) 8., 71.34 (1k) (k), or 71.45 (2) (a) 17.
2,88
Section
88. 71.07 (2dr) (a) of the statutes is amended to read:
71.07
(2dr) (a)
Credit. Any person may credit against taxes otherwise due under this chapter an amount equal to 5% of the amount obtained by subtracting from the person's qualified research expenses, as defined in section
41 of the internal revenue code, except that "qualified research expenses" include only expenses incurred by the claimant in a development zone under subch. VI of ch. 560, except that a taxpayer may elect the alternative computation under section
41 (c) (4) of the Internal Revenue Code and that election applies until the department permits its revocation and except that "qualified research expenses" do not include compensation used in computing the credit under sub. (2dj) nor research expenses incurred before the claimant is certified for tax benefits under s. 560.765 (3), the person's base amount, as defined in section
41 (c) of the internal revenue code, in a development zone, except that gross receipts used in calculating the base amount means gross receipts from sales attributable to Wisconsin under s. 71.04 (7) (b) 1. and 2.,
(d), (df)
1. and 2.,
and (dh)
1., 2., and 3., (dj) 1. and (dk) 1. and research expenses used in calculating the base amount include research expenses incurred before the claimant is certified for tax benefits under s. 560.765 (3), in a development zone, if the claimant submits with the claimant's return a copy of the claimant's certification for tax benefits under s. 560.765 (3) and a statement from the department of commerce verifying the claimant's qualified research expenses for research conducted exclusively in a development zone. The rules under s. 73.03 (35) apply to the credit under this paragraph. The rules under sub. (2di) (f) and (g), as they apply to the credit under that subsection, apply to claims under this paragraph. Section
41 (h) of the internal revenue code does not apply to the credit under this paragraph.
2,89
Section
89. 71.07 (2dy) of the statutes is created to read:
71.07 (2dy) Economic development tax credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection and is certified under s. 560.701 (2) and authorized to claim tax benefits under s. 560.703.
(b) Filing claims. Subject to the limitations under this subsection and ss. 560.701 to 560.706, for taxable years beginning after December 31, 2008, a claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08, up to the amount of the tax, the amount authorized for the claimant under s. 560.703.
(c) Limitations. 1. No credit may be allowed under this subsection unless the claimant includes with the claimant's return a copy of the claimant's certification under s. 560.701 (2) and a copy of the claimant's notice of eligibility to receive tax benefits under s. 560.703 (3).
2. 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 authorization to claim tax benefits under s. 560.703. 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.
(d) Administration. 1. Except as provided in subd. 2., s. 71.28 (4) (e) and (f), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.
2. If a claimant's certification is revoked under s. 560.705, or if a claimant becomes ineligible for tax benefits under s. 560.702, the claimant may not claim credits under this subsection for the taxable year that includes the day on which the certification is revoked; the taxable year that includes the day on which the claimant becomes ineligible for tax benefits; or succeeding taxable years and the claimant may not carry over unused credits from previous years to offset the tax imposed under s. 71.02 or 71.08 for the taxable year that includes the day on which certification is revoked; the taxable year that includes the day on which the claimant becomes ineligible for tax benefits; or succeeding taxable years.
3. Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.
2,90
Section
90. 71.07 (3p) (a) 1m. of the statutes is created to read:
71.07 (3p) (a) 1m. "Dairy cooperative" means a business organized under ch. 185 or 193 for the purpose of obtaining or processing milk.
2,91
Section
91. 71.07 (3p) (a) 3. (intro.) of the statutes is amended to read:
71.07 (3p) (a) 3. (intro.) "Dairy manufacturing modernization or expansion" means constructing, improving, or acquiring buildings or facilities, or acquiring equipment, for dairy manufacturing, including the following, if used exclusively for dairy manufacturing and if acquired and placed in service in this state during taxable years that begin after December 31, 2006, and before January 1, 2015, or, in the case of dairy cooperatives, if acquired and placed in service in this state during taxable years that begin after December 31, 2008, and before January 1, 2017:
2,92
Section
92. 71.07 (3p) (b) of the statutes is amended to read:
71.07 (3p) (b) Filing claims. Subject to the limitations provided in this subsection and s. 560.207, except as provided in par. (c) 5., for taxable years beginning after December 31, 2006, and before January 1, 2015, a claimant may claim as a credit against the taxes imposed under s. 71.02 or 71.08, up to the amount of the tax, an amount equal to 10 percent of the amount the claimant paid in the taxable year for dairy manufacturing modernization or expansion related to the claimant's dairy manufacturing operation.
2,93
Section
93. 71.07 (3p) (c) 2m. b. of the statutes is amended to read:
71.07 (3p) (c) 2m. b. The maximum amount of the credits that may be claimed by all claimants, other than members of dairy cooperatives, under this subsection and ss. 71.28 (3p) and 71.47 (3p) in fiscal year 2008-09, and in each fiscal year thereafter, is $700,000, as allocated under s. 560.207.
2,94
Section
94. 71.07 (3p) (c) 2m. bm. of the statutes is created to read:
71.07 (3p) (c) 2m. bm. The maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.28 (3p) and 71.47 (3p) in fiscal year 2009-10 is $600,000, as allocated under s. 560.207, and the maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.28 (3p) and 71.47 (3p) in fiscal year 2010-11, and in each fiscal year thereafter, is $700,000, as allocated under s. 560.207.
2,95
Section
95. 71.07 (3p) (c) 3. of the statutes is amended to read:
71.07 (3p) (c) 3. Partnerships, limited liability companies, and tax-option corporations, and dairy cooperatives may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of expenses under par. (b), except that the aggregate amount of credits that the entity may compute shall not exceed $200,000 for each of the entity's dairy manufacturing facilities. A partnership, limited liability company, or tax-option corporation, or dairy cooperative 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. Members of a dairy cooperative may claim the credit in proportion to the amount of milk that each member delivers to the dairy cooperative, as determined by the dairy cooperative.
2,96
Section
96. 71.07 (3p) (c) 5. of the statutes is created to read:
71.07 (3p) (c) 5. A claimant who is a member of a dairy cooperative may claim the credit, based on amounts described under par. (b) that are paid by the dairy cooperative, for taxable years beginning after December 31, 2008, and before January 1, 2017.
2,97
Section
97. 71.07 (3p) (c) 6. of the statutes is created to read:
71.07 (3p) (c) 6. No credit may be allowed under this subsection unless the claimant submits with the claimant's return a copy of the claimant's credit certification and allocation under s. 560.207.
2,98
Section
98. 71.07 (3p) (d) 2. of the statutes is amended to read:
71.07 (3p) (d) 2. If Except as provided in subd. 3., if the allowable amount of the claim under par. (b) exceeds the tax otherwise due under s. 71.02 or 71.08 or no tax is due under s. 71.02 or 71.08, the amount of the claim not used to offset the tax due shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (bn).
2,99
Section
99. 71.07 (3p) (d) 3. of the statutes is created to read:
71.07 (3p) (d) 3. With regard to claims that are based on amounts described under par. (b) that are paid by a dairy cooperative, if the allowable amount of the claim under par. (b) exceeds the tax otherwise due under s. 71.02 or 71.08, the amount of the claim not used to offset the tax due shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (bp).
2,100
Section
100. 71.07 (3r) of the statutes is created to read:
71.07 (3r) Meat processing facility investment credit. (a) Definitions. In this subsection:
1. "Claimant" means a person who files a claim under this subsection.
2. "Meat processing" means processing livestock into meat products or processing meat products for sale commercially.
3. "Meat processing modernization or expansion" means constructing, improving, or acquiring buildings or facilities, or acquiring equipment, for meat processing, including the following, if used exclusively for meat processing and if acquired and placed in service in this state during taxable years that begin after December 31, 2008, and before January 1, 2017:
a. Building construction, including livestock handling, product intake, storage, and warehouse facilities.
b. Building additions.
c. Upgrades to utilities, including water, electric, heat, refrigeration, freezing, and waste facilities.
d. Livestock intake and storage equipment.
e. Processing and manufacturing equipment, including cutting equipment, mixers, grinders, sausage stuffers, meat smokers, curing equipment, cooking equipment, pipes, motors, pumps, and valves.
f. Packaging and handling equipment, including sealing, bagging, boxing, labeling, conveying, and product movement equipment.
g. Warehouse equipment, including storage and curing racks.
h. Waste treatment and waste management equipment, including tanks, blowers, separators, dryers, digesters, and equipment that uses waste to produce energy, fuel, or industrial products.
i. Computer software and hardware used for managing the claimant's meat processing operation, including software and hardware related to logistics, inventory management, production plant controls, and temperature monitoring controls.
4. "Used exclusively" means used to the exclusion of all other uses except for use not exceeding 5 percent of total use.
(b) Filing claims. Subject to the limitations provided in this subsection and s. 560.208, for taxable years beginning after December 31, 2008, and before January 1, 2017, a claimant may claim as a credit against the taxes imposed under s. 71.02 or 71.08, up to the amount of the tax, an amount equal to 10 percent of the amount the claimant paid in the taxable year for meat processing modernization or expansion related to the claimant's meat processing operation.
(c)
Limitations. 1. No credit may be allowed under this subsection for any amount that the claimant paid for expenses described under par. (b) that the claimant also claimed as a deduction under section
162 of the Internal Revenue Code.
2. The aggregate amount of credits that a claimant may claim under this subsection is $200,000.
3. a. The maximum amount of the credits that may be allocated under this subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2009-10 is $300,000, as allocated under s. 560.208.
b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2010-11, and in each fiscal year thereafter, is $700,000, as allocated under s. 560.208.
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 expenses under par. (b), except that the aggregate amount of credits that the entity may compute shall not exceed $200,000. 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.
5. If 2 or more persons own and operate the meat processing operation, each person may claim a credit under par. (b) in proportion to his or her ownership interest, except that the aggregate amount of the credits claimed by all persons who own and operate the meat processing operation shall not exceed $200,000.
6. No credit may be allowed under this subsection unless the claimant submits with the claimant's return a copy of the claimant's credit certification and allocation under s. 560.208.
(d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.
2. If the allowable amount of the claim under par. (b) exceeds the tax otherwise due under s. 71.02 or 71.08, the amount of the claim not used to offset the tax due shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (bd).
2,101
Section
101. 71.07 (5b) (c) 1. of the statutes is repealed.
2,102
Section
102. 71.07 (5b) (c) 2. of the statutes is renumbered 71.07 (5b) (c).
2,103
Section
103. 71.07 (5d) (b) of the statutes is renumbered 71.07 (5d) (b) (intro.) and amended to read:
71.07 (5d) (b) Filing claims. (intro.) Subject to the limitations provided in this subsection and in s. 560.205, a claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08, up to the amount of those taxes, the following:
1. For taxable years beginning before January 1, 2008, in each taxable year for 2 consecutive years, beginning with the taxable year as certified by the department of commerce, an amount equal to 12.5 percent of the claimant's bona fide angel investment made directly in a qualified new business venture.
2,104
Section
104. 71.07 (5d) (b) 2. of the statutes is created to read:
71.07 (5d) (b) 2. For taxable years beginning after December 31, 2007, for the taxable year certified by the department of commerce, an amount equal to 25 percent of the claimant's bona fide angel investment made directly in a qualified new business venture.
2,105
Section
105. 71.07 (5d) (c) 2. of the statutes is amended to read:
71.07 (5d) (c) 2. The For taxable years beginning before January 1, 2008, the maximum amount of a claimant's investment that may be used as the basis for a credit under this subsection is $2,000,000 for each investment made directly in a business certified under s. 560.205 (1).
2,106
Section
106. 71.07 (5e) (b) of the statutes is amended to read:
71.07
(5e) (b)
Filing claims. Subject to the limitations provided in this subsection and subject to
2005 Wisconsin Act 479, section
17, beginning in the first taxable year following the taxable year in which the claimant claims
an exemption a deduction under s.
77.54 (48) 77.585 (9), a claimant may claim as a credit against the taxes imposed under ss. 71.02 and 71.08, up to the amount of those taxes, in each taxable year for 2 years, the amount
of sales and use tax certified by the department of commerce that
resulted from the claimant
claimed as an exemption claiming a deduction under s.
77.54 (48) 77.585 (9).
2,107
Section
107. 71.07 (5e) (c) 1. of the statutes is amended to read:
71.07 (5e) (c) 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
2,108
Section
108. 71.07 (5e) (c) 3. of the statutes is amended to read:
71.07 (5e) (c) 3. The total amount of the credits and exemptions the sales and use tax resulting from the deductions claimed under s. 77.585 (9) that may be claimed by all claimants under this subsection and ss. 71.28 (5e), 71.47 (5e), and 77.54 (48) 77.585 (9) is $7,500,000, as determined by the department of commerce.
2,109
Section
109. 71.08 (1) (intro.) of the statutes is amended to read:
71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust, or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (2fd), (3m), (3n), (3p), (3r), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (6), (6e), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w), and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w), and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:
2,110
Section
110. 71.10 (1) of the statutes is amended to read:
71.10 (1) Allocation of gross income, deductions, credits between 2 or more businesses. In any case of 2 or more organizations, trades or businesses (whether or not incorporated, whether or not organized in the United States and, whether or not affiliated
, and whether or not unitary) owned or controlled directly or indirectly by the same interests, the secretary or the secretary's delegate may distribute, apportion or allocate gross income, deductions, credits or allowances between or among such organizations, trades or businesses, if the secretary determines that such distribution, apportionment or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades or businesses. The authority granted under this subsection is in addition to, and not a limitation of or dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45., 71.26 (2) (a) 7. and 8., 71.34 (1k) (j) and (k), 71.45 (2) (a) 16. and 17., and 71.80 (23).
2,111
Section
111. 71.10 (1m) of the statutes is created to read:
71.10 (1m) Transactions without economic substance. (a) If any person, directly or indirectly, engages in a transaction or series of transactions without economic substance to create a loss or to reduce taxable income or to increase credits allowed in determining Wisconsin tax, the department shall determine the amount of a taxpayer's taxable income or tax so as to reflect what would have been the taxpayer's taxable income or tax if not for the transaction or transactions without economic substance causing the reduction in taxable income or tax.
(b) A transaction has economic substance only if the taxpayer shows all of the following:
1. The transaction changes the taxpayer's economic position in a meaningful way, apart from federal, state, local, and foreign tax effects.
2. The taxpayer has a substantial nontax purpose for entering into the transaction and the transaction is a reasonable means of accomplishing the substantial nontax purpose. A transaction has a substantial nontax purpose if it has substantial potential for profit, disregarding any tax effects.
(c) With respect to transactions between members of a controlled group as defined in section
267 (f) (1) of the Internal Revenue Code, such transactions shall be presumed to lack economic substance and the taxpayer shall bear the burden of establishing by clear and convincing evidence that a transaction or a series of transactions between the taxpayer and one or more members of the controlled group has economic substance.
2,112
Section
112. 71.10 (4) (gv) of the statutes is created to read:
71.10 (4) (gv) Economic development tax credit under s. 71.07 (2dy).
