LRBs0281/1
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2009 - 2010 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO 2009 SENATE BILL 461
February 11, 2010 - Offered by Senator Coggs.
SB461-SSA1,1,6 1An Act to amend 71.08 (1) (intro.); and to create 71.07 (5n), 71.10 (4) (fm), 71.28
2(5n), 71.30 (3) (dn), 71.47 (5n), 71.49 (1) (dn), 76.639 and 560.2065 of the
3statutes; relating to: an income and franchise tax credit for a qualified equity
4investment in a qualified community development entity, providing an
5exemption from emergency rule procedures, and requiring the exercise of
6rule-making authority.
Analysis by the Legislative Reference Bureau
Under federal law, the New Markets Tax Credit Program permits federal
taxpayers to receive a credit against federal income taxes for making qualified equity
investments in qualified community development entities (QCDE). Federal law
defines a QCDE as an entity with the primary mission of serving or providing
investment capital for low-income communities or low-income persons that has
been certified by the secretary of the Internal Revenue Service. Federal law defines
a qualified equity investment as an investment funded by the QCDE for the purpose
of making loans to or investments in certain businesses located in low-income
communities identified under the federal law.
This bill authorizes the Department of Commerce (Commerce) to certify a
qualified equity investment in a QCDE. The bill also authorizers Commerce to

certify a person who has invested in a certified qualified equity investment to receive
a credit against state income and franchise taxes and against license fees paid by
insurers. Commerce may certify up to $10,000,000 in tax credits in any fiscal year.
The credit may be claimed for seven consecutive taxable years beginning with the
taxable year in which the taxpayer makes a qualified equity investment. The
amount of the credit that a taxpayer may claim is equal to the amount of the
taxpayer's investment multiplied by the following percentages:
1. For the first taxable year, zero percent.
2. For the next six taxable years, 3 percent.
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:
SB461-SSA1, s. 1 1Section 1. 71.07 (5n) of the statutes is created to read:
SB461-SSA1,2,32 71.07 (5n) New markets credit. (a) Definition. In this subsection, "claimant"
3means a person who files a claim under this subsection.
SB461-SSA1,2,84 (b) Filing claims. Subject to the limitations provided under this subsection and
5s. 560.2065, for investments made after December 31, 2010, a claimant may claim
6as a credit against the taxes imposed under ss. 71.02 and 71.08, up to the amount of
7the taxes, the amount of the claimant's qualified equity investment, as certified
8under s. 560.2065 (2), multiplied by the following percentage:
SB461-SSA1,2,109 1. For the taxable year that corresponds to the first credit allowance date, as
10defined under 26 USC 45D (a) (3), zero percent.
SB461-SSA1,2,1311 2. For the taxable years that correspond to the 6 credit allowance dates, as
12defined under 26 USC 45D (a) (3), following the credit allowance date described in
13subd. 1., 3 percent.
SB461-SSA1,3,1614 (c) Limitations. 1. A partnership, limited liability company, or tax-option
15corporation may not claim the credit under this subsection. The partners of a
16partnership, members of a limited liability company, or shareholders in a tax-option

1corporation may claim the credit under this subsection based on eligible costs
2incurred by the partnership, company, or tax-option corporation. The partnership,
3limited liability company, or tax-option corporation shall calculate the amount of the
4credit which may be claimed by each partner, member, or shareholder and shall
5provide that information to the partner, member, or shareholder. For shareholders
6of a tax-option corporation, the credit may be allocated in proportion to the
7ownership interest of each shareholder. Credits computed by a partnership or
8limited liability company may be claimed in proportion to the ownership interests
9of the partners or members or allocated to partners or members as provided in a
10written agreement among the partners or members that is entered into no later than
11the last day of the taxable year of the partnership or limited liability company, for
12which the credit is claimed. Any partner or member who claims the credit as
13provided under this paragraph shall attach a copy of the agreement, if applicable, to
14the tax return on which the credit is claimed. A person claiming the credit as
15provided under this paragraph is solely responsible for any tax liability arising from
16a dispute with the department of revenue related to claiming the credit.
SB461-SSA1,3,2317 2. Any claimant who transfers an interest in a partnership, limited liability
18company, or tax-option corporation after the first credit allowance date, as defined
19under 26 USC 45D (b), but before the final credit allowance date for the credit
20allowed under this subsection shall be entitled to claim the credit for the remaining
21credit allowance dates by filing with the claimant's return a written agreement
22between the claimant and the transferee of the interest that specifies that the
23claimant, not the transferee, is the person entitled to claim the credit.
SB461-SSA1,4,3
13. The Wisconsin adjusted basis of any investment for which a credit is claimed
2under par. (b) shall be reduced by the amount of the credit that is offset against
3Wisconsin income taxes.
SB461-SSA1,4,54 4. The limitation under section 469 (a) (1) (B) of the Internal Revenue Code does
5not apply to the credit under this subsection.
SB461-SSA1,4,76 5. A claimant may claim the credit under this subsection regardless of whether
7the claimant claims a credit under 26 USC 45D.
SB461-SSA1,4,98 (d) Administration. 1. Section 71.28 (4) (e) to (h), as it applies to the credit
9under s. 71.28 (4), applies to the credit under this subsection.
SB461-SSA1,4,1410 2. The department of revenue may promulgate rules regarding the recapture
11of tax credits claimed under this subsection, consistent with 26 USC 45D (g). If a
12claimant's federal tax credit under 26 USC 45D is subject to recapture under 26 USC
1345D
(g), the claimant's tax credit under this subsection is subject to recapture at the
14same time and in the same manner as the claimant's federal tax credit.
SB461-SSA1,4,1715 3. No credit may be allowed under this subsection unless the claimant includes
16with the claimant's return a copy of the claimant's certification for tax benefits under
17s. 560.2065 (2) (b).
SB461-SSA1, s. 2 18Section 2. 71.08 (1) (intro.) of the statutes, as affected by 2009 Wisconsin Act
1928
, is amended to read:
SB461-SSA1,5,420 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
21couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
22ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (3m), (3n), (3p),
23(3q), (3r), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (5n), (6), (6e), (8r), and (9e),
2471.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3), (3n), (3t), and (3w),
2571.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3), (3n), (3t), and (3w),

171.57 to 71.61, and 71.613 and subch. VIII and payments to other states under s.
271.07 (7), is less than the tax under this section, there is imposed on that natural
3person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02,
4an alternative minimum tax computed as follows:
SB461-SSA1, s. 3 5Section 3. 71.10 (4) (fm) of the statutes is created to read:
SB461-SSA1,5,66 71.10 (4) (fm) New markets credit under s. 71.07 (5n).
SB461-SSA1, s. 4 7Section 4. 71.28 (5n) of the statutes is created to read:
SB461-SSA1,5,98 71.28 (5n) New markets credit. (a) Definition. In this subsection, "claimant"
9means a person who files a claim under this subsection.
SB461-SSA1,5,1410 (b) Filing claims. Subject to the limitations provided under this subsection and
11s. 560.2065, for investments made after December 31, 2010, a claimant may claim
12as a credit against the taxes imposed under s. 71.23, up to the amount of the taxes,
13the amount of the claimant's qualified equity investment, as certified under s.
14560.2065 (2), multiplied by the following percentage:
SB461-SSA1,5,1615 1. For the taxable year that corresponds to the first credit allowance date, as
16defined under 26 USC 45D (a) (3), zero percent.
SB461-SSA1,5,1917 2. For the taxable years that correspond to the 6 credit allowance dates, as
18defined under 26 USC 45D (a) (3), following the credit allowance date described in
19subd. 1., 3 percent.
SB461-SSA1,6,1320 (c) Limitations. 1. A partnership, limited liability company, or tax-option
21corporation may not claim the credit under this subsection. The partners of a
22partnership, members of a limited liability company, or shareholders in a tax-option
23corporation may claim the credit under this subsection based on eligible costs
24incurred by the partnership, company, or tax-option corporation. The partnership,
25limited liability company, or tax-option corporation shall calculate the amount of the

1credit which may be claimed by each partner, member, or shareholder and shall
2provide that information to the partner, member, or shareholder. For shareholders
3of a tax-option corporation, the credit may be allocated in proportion to the
4ownership interest of each shareholder. Credits computed by a partnership or
5limited liability company may be claimed in proportion to the ownership interests
6of the partners or members or allocated to partners or members as provided in a
7written agreement among the partners or members that is entered into no later than
8the last day of the taxable year of the partnership or limited liability company, for
9which the credit is claimed. Any partner or member who claims the credit as
10provided under this paragraph shall attach a copy of the agreement, if applicable, to
11the tax return on which the credit is claimed. A person claiming the credit as
12provided under this paragraph is solely responsible for any tax liability arising from
13a dispute with the department of revenue related to claiming the credit.
SB461-SSA1,6,2014 2. Any claimant who transfers an interest in a partnership, limited liability
15company, or tax-option corporation after the first credit allowance date, as defined
16under 26 USC 45D (b), but before the final credit allowance date for the credit
17allowed under this subsection shall be entitled to claim the credit for the remaining
18credit allowance dates by filing with the claimant's return a written agreement
19between the claimant and the transferee of the interest that specifies that the
20claimant, not the transferee, is the person entitled to claim the credit.
SB461-SSA1,6,2321 3. The Wisconsin adjusted basis of any investment for which a credit is claimed
22under par. (b) shall be reduced by the amount of the credit that is offset against
23Wisconsin income taxes.
SB461-SSA1,6,2524 4. The limitation under section 469 (a) (1) (B) of the Internal Revenue Code does
25not apply to the credit under this subsection.
SB461-SSA1,7,2
15. A claimant may claim the credit under this subsection regardless of whether
2the claimant claims a credit under 26 USC 45D.
SB461-SSA1,7,43 (d) Administration. 1. Subsection (4) (e) to (h), as it applies to the credit under
4sub. (4), applies to the credit under this subsection.
SB461-SSA1,7,95 2. The department of revenue may promulgate rules regarding the recapture
6of tax credits claimed under this subsection, consistent with 26 USC 45D (g). If a
7claimant's federal tax credit under 26 USC 45D is subject to recapture under 26 USC
845D
(g), the claimant's tax credit under this subsection is subject to recapture at the
9same time and in the same manner as the claimant's federal tax credit.
SB461-SSA1,7,1210 3. No credit may be allowed under this subsection unless the claimant includes
11with the claimant's return a copy of the claimant's certification for tax benefits under
12s. 560.2065 (2) (b).
SB461-SSA1, s. 5 13Section 5. 71.30 (3) (dn) of the statutes is created to read:
SB461-SSA1,7,1414 71.30 (3) (dn) New markets credit under s. 71.28 (5n).
SB461-SSA1, s. 6 15Section 6. 71.47 (5n) of the statutes is created to read:
SB461-SSA1,7,1716 71.47 (5n) New markets credit. (a) Definition. In this subsection, "claimant"
17means a person who files a claim under this subsection.
SB461-SSA1,7,2218 (b) Filing claims. Subject to the limitations provided under this subsection and
19s. 560.2065, for investments made after December 31, 2010, a claimant may claim
20as a credit against the taxes imposed under s. 71.43, up to the amount of the taxes,
21the amount of the claimant's qualified equity investment, as certified under s.
22560.2065 (2), multiplied by the following percentage:
SB461-SSA1,7,2423 1. For the taxable year that corresponds to the first credit allowance date, as
24defined under 26 USC 45D (a) (3), zero percent.
SB461-SSA1,8,3
12. For the taxable years that correspond to the 6 credit allowance dates, as
2defined under 26 USC 45D (a) (3), following the credit allowance date described in
3subd. 1., 3 percent.
SB461-SSA1,8,224 (c) Limitations. 1. A partnership, limited liability company, or tax-option
5corporation may not claim the credit under this subsection. The partners of a
6partnership, members of a limited liability company, or shareholders in a tax-option
7corporation may claim the credit under this subsection based on eligible costs
8incurred by the partnership, company, or tax-option corporation. The partnership,
9limited liability company, or tax-option corporation shall calculate the amount of the
10credit which may be claimed by each partner, member, or shareholder and shall
11provide that information to the partner, member, or shareholder. For shareholders
12of a tax-option corporation, the credit may be allocated in proportion to the
13ownership interest of each shareholder. Credits computed by a partnership or
14limited liability company may be claimed in proportion to the ownership interests
15of the partners or members or allocated to partners or members as provided in a
16written agreement among the partners or members that is entered into no later than
17the last day of the taxable year of the partnership or limited liability company, for
18which the credit is claimed. Any partner or member who claims the credit as
19provided under this paragraph shall attach a copy of the agreement, if applicable, to
20the tax return on which the credit is claimed. A person claiming the credit as
21provided under this paragraph is solely responsible for any tax liability arising from
22a dispute with the department of revenue related to claiming the credit.
SB461-SSA1,9,423 2. Any claimant who transfers an interest in a partnership, limited liability
24company, or tax-option corporation after the first credit allowance date, as defined
25under 26 USC 45D (b), but before the final credit allowance date for the credit

1allowed under this subsection shall be entitled to claim the credit for the remaining
2credit allowance dates by filing with the claimant's return a written agreement
3between the claimant and the transferee of the interest that specifies that the
4claimant, not the transferee, is the person entitled to claim the credit.
SB461-SSA1,9,75 3. The Wisconsin adjusted basis of any investment for which a credit is claimed
6under par. (b) shall be reduced by the amount of the credit that is offset against
7Wisconsin income taxes.
SB461-SSA1,9,98 4. A claimant may claim the credit under this subsection regardless of whether
9the claimant claims a credit under 26 USC 45D.
SB461-SSA1,9,1110 (d) Administration. 1. Section 71.28 (4) (e) to (h), as it applies to the credit
11under s. 71.28 (4), applies to the credit under this subsection.
SB461-SSA1,9,1612 2. The department of revenue may promulgate rules regarding the recapture
13of tax credits claimed under this subsection, consistent with 26 USC 45D (g). If a
14claimant's federal tax credit under 26 USC 45D is subject to recapture under 26 USC
1545D
(g), the claimant's tax credit under this subsection is subject to recapture at the
16same time and in the same manner as the claimant's federal tax credit.
SB461-SSA1,9,1917 3. No credit may be allowed under this subsection unless the claimant includes
18with the claimant's return a copy of the claimant's certification for tax benefits under
19s. 560.2065 (2) (b).
SB461-SSA1, s. 7 20Section 7. 71.49 (1) (dn) of the statutes is created to read:
SB461-SSA1,9,2121 71.49 (1) (dn) New markets credit under s. 71.47 (5n).
SB461-SSA1, s. 8 22Section 8. 76.639 of the statutes is created to read:
SB461-SSA1,9,26 2376.639 New markets credit. (1) Filing claims. Subject to the limitations
24provided under this section and s. 560.2065, for investments made after December
2531, 2010, an insurer may claim as a credit against the fees imposed under s. 76.60,

176.63, 76.65, 76.66, or 76.67 the amount of the insurer's qualified equity investment,
2as certified under s. 560.2065 (2), multiplied by the following percentage:
SB461-SSA1,10,43 (a) For the taxable year that corresponds to the first credit allowance date, as
4defined under 26 USC 45D (a) (3), zero percent.
SB461-SSA1,10,75 (b) For the taxable years that correspond to the 6 credit allowance dates, as
6defined under 26 USC 45D (a) (3), following the credit allowance date described in
7subd. 1., 3 percent.
SB461-SSA1,10,9 8(2) Limitations. (a) An insurer may claim the credit under this section
9regardless of whether the insurer claims a credit under 26 USC 45D.
SB461-SSA1,10,1410 (b) The department of revenue may promulgate rules regarding the recapture
11of credits claimed under this section, consistent with 26 USC 45D (g). If a claimant's
12federal tax credit under 26 USC 45D is subject to recapture under 26 USC 45D (g),
13the claimant's tax credit under this section is subject to recapture at the same time
14and in the same manner as the claimant's federal tax credit.
SB461-SSA1,10,1715 (c) No credit may be allowed under this section unless the claimant includes
16with the claimant's return a copy of the claimant's certification for tax benefits under
17s. 560.2065 (2) (b).
SB461-SSA1,10,23 18(3) Carry-forward. If the credit under sub. (2) is not entirely offset against the
19fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due, the unused balance
20may be carried forward and credited against those fees for the following 15 years to
21the extent that it is not offset by those fees otherwise due in all the years between
22the year in which the expense was made and the year in which the carry-forward
23credit is claimed.
SB461-SSA1, s. 9 24Section 9. 560.2065 of the statutes is created to read:
SB461-SSA1,11,2
1560.2065 Certification of qualified equity investments. (1) Definitions.
2In this section:
SB461-SSA1,11,43 (a) "Credit allowance date" means a credit allowance date as defined under 26
4USC 45D
(a) (3).
SB461-SSA1,11,65 (b) "Qualified active low-income community business" means a qualified active
6low-income community business as defined in 26 USC 45D (d) 2.
SB461-SSA1,11,87 (c) "Qualified community development entity" means a qualified community
8development entity as defined under 26 USC 45D (c).
SB461-SSA1,11,109 (d) "Qualified equity investment" means a qualified equity investment as
10defined under 26 USC 45D (b).
SB461-SSA1,11,11 11(2) Certification. The department may do all of the following:
SB461-SSA1,11,1312 (a) Certify a qualified equity investment under this paragraph if all of the
13following apply:
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