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SB62,88,2
12. The aggregate amount of credits that a claimant may claim under this
2subsection is $200,000.
SB62,88,53 3. a. The maximum amount of the credits that may be allocated under this
4subsection and ss. 71.07 (3r) and 71.47 (3r) in fiscal year 2009-10 is $300,000, as
5allocated under s. 560.208.
SB62,88,86 b. The maximum amount of the credits that may be allocated under this
7subsection and ss. 71.07 (3r) and 71.47 (3r) in fiscal year 2010-11, and in each fiscal
8year thereafter, is $700,000, as allocated under s. 560.208.
SB62,88,179 4. Partnerships, limited liability companies, and tax-option corporations may
10not claim the credit under this subsection, but the eligibility for, and the amount of,
11the credit are based on their payment of expenses under par. (b), except that the
12aggregate amount of credits that the entity may compute shall not exceed $200,000.
13A partnership, limited liability company, or tax-option corporation shall compute
14the amount of credit that each of its partners, members, or shareholders may claim
15and shall provide that information to each of them. Partners, members of limited
16liability companies, and shareholders of tax-option corporations may claim the
17credit in proportion to their ownership interest.
SB62,88,2118 5. If 2 or more persons own and operate the meat processing operation, each
19person may claim a credit under par. (b) in proportion to his or her ownership
20interest, except that the aggregate amount of the credits claimed by all persons who
21own and operate the meat processing operation shall not exceed $200,000.
SB62,88,2422 6. No credit may be allowed under this subsection unless the claimant submits
23with the claimant's return a copy of the claimant's credit certification and allocation
24under s. 560.208.
SB62,89,2
1(d) Administration. 1. Subsection (4) (e), (g), and (h), as it applies to the credit
2under sub. (4), applies to the credit under this subsection.
SB62,89,73 2. If the allowable amount of the claim under par. (b) exceeds the tax otherwise
4due under s. 71.23, the amount of the claim not used to offset the tax due shall be
5certified by the department of revenue to the department of administration for
6payment by check, share draft, or other draft drawn from the appropriation account
7under s. 20.835 (2) (bd).
SB62, s. 148 8Section 148. 71.28 (4) (ad) 1. of the statutes is amended to read:
SB62,89,239 71.28 (4) (ad) 1. Except as provided in subds. 2. and 3., any corporation may
10credit against taxes otherwise due under this chapter an amount equal to 5 percent
11of the amount obtained by subtracting from the corporation's qualified research
12expenses, as defined in section 41 of the Internal Revenue Code, except that
13"qualified research expenses" includes only expenses incurred by the claimant,
14incurred for research conducted in this state for the taxable year, except that a
15taxpayer may elect the alternative computation under section 41 (c) (4) of the
16Internal Revenue Code and that election applies until the department permits its
17revocation, except as provided in par. (af), and except that "qualified research
18expenses" does not include compensation used in computing the credit under subs.
19(1dj) and (1dx), the corporation's base amount, as defined in section 41 (c) of the
20Internal Revenue Code, except that gross receipts used in calculating the base
21amount means gross receipts from sales attributable to Wisconsin under s. 71.25 (9)
22(b) 1. and 2., (d), (df) 1. and 2., and (dh)1., 2., and 3., (dj) 1., and (dk) 1. Section 41
23(h) of the Internal Revenue Code does not apply to the credit under this paragraph.
SB62, s. 149 24Section 149. 71.28 (4) (ad) 2. of the statutes is amended to read:
SB62,90,18
171.28 (4) (ad) 2. For taxable years beginning after June 30, 2007, any
2corporation may credit against taxes otherwise due under this chapter an amount
3equal to 10 percent of the amount obtained by subtracting from the corporation's
4qualified research expenses, as defined in section 41 of the Internal Revenue Code,
5except that "qualified research expenses" includes only expenses incurred by the
6claimant for research related to designing internal combustion engines for vehicles,
7including expenses related to designing vehicles that are powered by such engines
8and improving production processes for such engines and vehicles, incurred for
9research conducted in this state for the taxable year, except that a taxpayer may elect
10the alternative computation under section 41 (c) (4) of the Internal Revenue Code
11and that election applies until the department permits its revocation, except as
12provided in par. (af), and except that "qualified research expenses" does not include
13compensation used in computing the credit under subs. (1dj) and (1dx), the
14corporation's base amount, as defined in section 41 (c) of the Internal Revenue Code,
15except that gross receipts used in calculating the base amount means gross receipts
16from sales attributable to Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d), (df) 1. and
172., (dh) 1., 2., and 3., (dj) 1., and (dk) 1
. Section 41 (h) of the Internal Revenue Code
18does not apply to the credit under this paragraph.
SB62, s. 150 19Section 150. 71.28 (4) (ad) 3. of the statutes is amended to read:
SB62,91,1320 71.28 (4) (ad) 3. For taxable years beginning after June 30, 2007, any
21corporation may credit against taxes otherwise due under this chapter an amount
22equal to 10 percent of the amount obtained by subtracting from the corporation's
23qualified research expenses, as defined in section 41 of the Internal Revenue Code,
24except that "qualified research expenses" includes only expenses incurred by the
25claimant for research related to the design and manufacturing of energy efficient

1lighting systems, building automation and control systems, or automotive batteries
2for use in hybrid-electric vehicles, that reduce the demand for natural gas or
3electricity or improve the efficiency of its use, incurred for research conducted in this
4state for the taxable year, except that a taxpayer may elect the alternative
5computation under section 41 (c) (4) of the Internal Revenue Code and that election
6applies until the department permits its revocation, except as provided in par. (af),
7and except that "qualified research expenses" does not include compensation used
8in computing the credit under subs. (1dj) and (1dx), the corporation's base amount,
9as defined in section 41 (c) of the Internal Revenue Code, except that gross receipts
10used in calculating the base amount means gross receipts from sales attributable to
11Wisconsin under s. 71.25 (9) (b) 1. and 2. and (d), (df), 1. and 2., (dh) 1., 2., and 3., (dj)
121., and (dk) 1
. Section 41 (h) of the Internal Revenue Code does not apply to the credit
13under this paragraph.
SB62, s. 151 14Section 151. 71.28 (4) (am) 1. of the statutes is amended to read:
SB62,92,1315 71.28 (4) (am) 1. In addition to the credit under par. (ad), any corporation may
16credit against taxes otherwise due under this chapter an amount equal to 5 percent
17of the amount obtained by subtracting from the corporation's qualified research
18expenses, as defined in section 41 of the Internal Revenue Code, except that
19"qualified research expenses" include only expenses incurred by the claimant in a
20development zone under subch. VI of ch. 560, except that a taxpayer may elect the
21alternative computation under section 41 (c) (4) of the Internal Revenue Code and
22that election applies until the department permits its revocation and except that
23"qualified research expenses" do not include compensation used in computing the
24credit under sub. (1dj) nor research expenses incurred before the claimant is certified
25for tax benefits under s. 560.765 (3), the corporation's base amount, as defined in

1section 41 (c) of the Internal Revenue Code, in a development zone, except that gross
2receipts used in calculating the base amount means gross receipts from sales
3attributable to Wisconsin under s. 71.25 (9) (b) 1. and 2., (d), (df) 1. and 2., and (dh)
41., 2., and 3., (dj) 1., and (dk) 1. and research expenses used in calculating the base
5amount include research expenses incurred before the claimant is certified for tax
6benefits under s. 560.765 (3), in a development zone, if the claimant submits with the
7claimant's return a copy of the claimant's certification for tax benefits under s.
8560.765 (3) and a statement from the department of commerce verifying the
9claimant's qualified research expenses for research conducted exclusively in a
10development zone. The rules under s. 73.03 (35) apply to the credit under this
11subdivision. The rules under sub. (1di) (f) and (g) as they apply to the credit under
12that subsection apply to claims under this subdivision. Section 41 (h) of the Internal
13Revenue Code does not apply to the credit under this subdivision.
SB62, s. 152 14Section 152. 71.28 (5b) (c) 1. of the statutes is repealed.
SB62, s. 153 15Section 153. 71.28 (5b) (c) 2. of the statutes is renumbered 71.28 (5b) (c).
SB62, s. 154 16Section 154. 71.28 (5e) (b) of the statutes is amended to read:
SB62,92,2417 71.28 (5e) (b) Filing claims. Subject to the limitations provided in this
18subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first
19taxable year following the taxable year in which the claimant claims an exemption
20a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against
21the taxes imposed under s. 71.23, up to the amount of those taxes, in each taxable
22year for 2 years, the amount of sales and use tax certified by the department of
23commerce that resulted from the claimant claimed as an exemption claiming a
24deduction
under s. 77.54 (48) 77.585 (9).
SB62, s. 155 25Section 155. 71.28 (5e) (c) 1. of the statutes is amended to read:
SB62,93,2
171.28 (5e) (c) 1. No credit may be allowed under this subsection unless the
2claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
SB62, s. 156 3Section 156. 71.28 (5e) (c) 3. of the statutes is amended to read:
SB62,93,74 71.28 (5e) (c) 3. The total amount of the credits and exemptions the sales and
5use tax resulting from the deductions claimed under s. 77.585 (9)
that may be claimed
6by all claimants under this subsection and ss. 71.07 (5e), 71.47 (5e), and 77.54 (48)
777.585 (9) is $7,500,000, as determined by the department of commerce.
SB62, s. 157 8Section 157. 71.30 (2) of the statutes is amended to read:
SB62,93,209 71.30 (2) Allocation of gross income, deductions, credits between 2 or more
10businesses.
In any case of 2 or more organizations, trades or businesses (whether or
11not incorporated, whether or not organized in the United States and, whether or not
12affiliated, and whether or not unitary) owned or controlled directly or indirectly by
13the same interests, the secretary or his or her delegate may distribute, apportion or
14allocate gross income, deductions, credits or allowances between or among such
15organizations, trades or businesses, if he or she determines that such distribution,
16apportionment or allocation is necessary in order to prevent evasion of taxes or
17clearly to reflect the income of any of such organizations, trades or businesses. The
18authority granted under this subsection is in addition to, and not a limitation of or
19dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45., 71.26 (2) (a) 7. and 8.,
2071.34 (1k) (j) and (k), 71.45 (2) (a) 16. and 17., and 71.80 (23).
SB62, s. 158 21Section 158. 71.30 (2m) of the statutes is created to read:
SB62,94,322 71.30 (2m) Transactions without economic substance. (a) If any person,
23directly or indirectly, engages in a transaction or series of transactions without
24economic substance to create a loss or to reduce taxable income or to increase credits
25allowed in determining Wisconsin tax, the department shall determine the amount

1of a taxpayer's taxable income or tax so as to reflect what would have been the
2taxpayer's taxable income or tax if not for the transaction or transactions without
3economic substance causing the reduction in taxable income or tax.
SB62,94,54 (b) A transaction has economic substance only if the taxpayer shows both of the
5following:
SB62,94,76 1. The transaction changes the taxpayer's economic position in a meaningful
7way, apart from federal, state, local, and foreign tax effects.
SB62,94,118 2. The taxpayer has a substantial nontax purpose for entering into the
9transaction and the transaction is a reasonable means of accomplishing the
10substantial nontax purpose. A transaction has a substantial nontax purpose if it has
11substantial potential for profit, disregarding any tax effects.
SB62,94,1712 (c) With respect to transactions between members of a controlled group as
13defined in section 267 (f) (1) of the Internal Revenue Code, such transactions shall
14be presumed to lack economic substance and the taxpayer shall bear the burden of
15establishing by clear and convincing evidence that a transaction or a series of
16transactions between the taxpayer and one or more members of the controlled group
17has economic substance.
SB62, s. 159 18Section 159. 71.30 (3) (em) of the statutes is renumbered 71.30 (3) (eh).
SB62, s. 160 19Section 160. 71.30 (3) (ema) of the statutes is created to read:
SB62,94,2020 71.30 (3) (ema) Economic development tax credit under s. 71.28 (1dy).
SB62, s. 161 21Section 161. 71.30 (3) (emb) of the statutes is renumbered 71.30 (3) (ei).
SB62, s. 162 22Section 162. 71.30 (3) (en) of the statutes is renumbered 71.30 (3) (ej).
SB62, s. 163 23Section 163. 71.30 (3) (eo) of the statutes is renumbered 71.30 (3) (ek).
SB62, s. 164 24Section 164. 71.30 (3) (eom) of the statutes is renumbered 71.30 (3) (eL).
SB62, s. 165 25Section 165. 71.30 (3) (f) of the statutes is amended to read:
SB62,95,6
171.30 (3) (f) The total of farmers' drought property tax credit under s. 71.28
2(1fd), farmland preservation credit under subch. IX, farmland tax relief credit under
3s. 71.28 (2m), dairy manufacturing facility investment credit under s. 71.28 (3p),
4meat processing facility investment credit under s. 71.28 (3r), enterprise zone jobs
5credit under s. 71.28 (3w), film production services credit under s. 71.28 (5f) (b) 2.,
6and estimated tax payments under s. 71.29.
SB62, s. 166 7Section 166. 71.34 (1c) of the statutes is created to read:
SB62,95,108 71.34 (1c) For purposes of sub. (1k) (j) and (L), "intangible expenses" include
9the following, to the extent that the amounts would otherwise be deductible in
10computing Wisconsin adjusted gross income:
SB62,95,1311 (a) Expenses, losses, and costs for, related to, or directly or indirectly in
12connection with the acquisition, use, maintenance, management, ownership, sale,
13exchange, or any other disposition of intangible property.
SB62,95,1514 (b) Losses related to, or incurred in connection directly or indirectly with,
15factoring transactions or discounting transactions.
SB62,95,1616 (c) Royalty, patent, technical, and copyright fees.
SB62,95,1717 (d) Licensing fees.
SB62,95,1818 (e) Other similar expenses, losses, and costs.
SB62, s. 167 19Section 167. 71.34 (1d) of the statutes is created to read:
SB62,95,2220 71.34 (1d) "Intangible property" includes stocks, bonds, financial instruments,
21patents, patent applications, trade names, trademarks, service marks, copyrights,
22mask works, trade secrets, and similar types of intangible assets.
SB62, s. 168 23Section 168. 71.34 (1h) of the statutes is created to read:
SB62,96,524 71.34 (1h) For purposes of sub. (1k) (j) and (L), "management fees" include
25expenses and costs, not including interest expenses, pertaining to accounts

1receivable, accounts payable, employee benefit plans, insurance, legal matters,
2payroll, data processing, purchasing, taxation, financial matters, securities,
3accounting, or reporting and compliance matters or similar activities, to the extent
4that the amounts would otherwise be deductible in the computation of Wisconsin
5adjusted gross income.
SB62, s. 169 6Section 169. 71.34 (1k) (g) of the statutes is amended to read:
SB62,96,107 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
8corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy),
9(3), (3g), (3h), (3n), (3p), (3r), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), and (5k) and
10passed through to shareholders.
SB62, s. 170 11Section 170. 71.34 (1k) (j) of the statutes is amended to read:
SB62,96,1612 71.34 (1k) (j) An addition shall be made for any amount deducted or excluded
13under the Internal Revenue Code for interest expenses and , rental expenses,
14intangible expenses, and management fees
that are directly or indirectly paid,
15accrued, or incurred to, or in connection directly or indirectly with one or more direct
16or indirect transactions with, one or more related entities.
SB62, s. 171 17Section 171. 71.34 (1k) (L) of the statutes is amended to read:
SB62,96,2318 71.34 (1k) (L) A deduction shall be allowed for the amount added, pursuant to
19par. (j) or s. 71.05 (6) (a) 24., 71.26 (2) (a) 7., or 71.45 (2) (a) 16., to the federal income
20of a related entity that paid interest expenses or, rental expenses, intangible
21expenses, or management fees
to the corporation, to the extent that the related entity
22could not offset such amount with the deduction allowable under par. (k) or s. 71.05
23(6) (b) 45., 71.26 (2) (a) 8., or 71.45 (2) (a) 17.
SB62, s. 172 24Section 172. 71.42 (1sg) of the statutes is created to read:
SB62,97,4
171.42 (1sg) For purposes of ss. 71.45 (2) (a) 16. and 18. and 71.255 (2) (d) 1.,
2"intangible expenses" include the following, to the extent that the amounts would
3otherwise be deductible in computing net income under the Internal Revenue Code,
4as adjusted under s. 71.45 (2):
SB62,97,75 (a) Expenses, losses, and costs for, related to, or directly or indirectly in
6connection with the acquisition, use, maintenance, management, ownership, sale,
7exchange, or any other disposition of intangible property.
SB62,97,98 (b) Losses related to, or incurred in connection directly or indirectly with,
9factoring transactions or discounting transactions.
SB62,97,1010 (c) Royalty, patent, technical, and copyright fees.
SB62,97,1111 (d) Licensing fees.
SB62,97,1212 (e) Other similar expenses, losses, and costs.
SB62, s. 173 13Section 173. 71.42 (1sh) of the statutes is created to read:
SB62,97,1614 71.42 (1sh) "Intangible property" includes stocks, bonds, financial
15instruments, patents, patent applications, trade names, trademarks, service marks,
16copyrights, mask works, trade secrets, and similar types of intangible assets.
SB62, s. 174 17Section 174. 71.42 (1t) of the statutes is amended to read:
SB62,97,2018 71.42 (1t) For purposes of s. ss. 71.45 (2) (a) 16. and 18. and 71.255 (2) (d) 1.,
19"interest expenses" means interest that would otherwise be deductible under section
20163 of the Internal Revenue Code, as adjusted under s. 71.45 (2).
SB62, s. 175 21Section 175. 71.42 (3c) of the statutes is created to read:
SB62,98,322 71.42 (3c) For purposes of s. 71.45 (2) (a) 16. and 18., "management fees"
23include expenses and costs, not including interest expenses, pertaining to accounts
24receivable, accounts payable, employee benefit plans, insurance, legal matters,
25payroll, data processing, purchasing, taxation, financial matters, securities,

1accounting, or reporting and compliance matters or similar activities, to the extent
2that the amounts would otherwise be deductible in determining net income under
3the Internal Revenue Code as adjusted under s. 71.45 (2).
SB62, s. 176 4Section 176. 71.43 (2) of the statutes is amended to read:
SB62,98,255 71.43 (2) Franchise tax on corporations. For the privilege of exercising its
6franchise, buying or selling lottery prizes if the winning tickets were originally
7bought in this state or doing business in this state in a corporate capacity, except as
8provided under s. 71.23 (3), every domestic or foreign corporation, except
9corporations specified in ss. 71.26 (1) and 71.45 (1) (a), shall annually pay a franchise
10tax according to or measured by its entire Wisconsin net income of the preceding
11taxable year at the rates set forth in s. 71.46 (2). In addition, except as provided in
12ss. 71.23 (3), 71.26 (1) and 71.45 (1) (a), a corporation that ceases doing business in
13this state shall pay a special franchise tax according to or measured by its entire
14Wisconsin net income for the taxable year during which the corporation ceases doing
15business in this state at the rate under s. 71.46 (2). Every corporation organized
16under the laws of this state shall be deemed to be residing within this state for the
17purposes of this franchise tax. All provisions of this chapter and ch. 73 relating to
18income taxation of corporations shall apply to franchise taxes imposed under this
19subsection, unless the context requires otherwise. The tax imposed by this
20subsection on insurance companies subject to taxation under this chapter shall be
21based on Wisconsin net income computed under s. 71.45, and no other provision of
22this chapter relating to computation of taxable income for other corporations shall
23apply to such insurance companies, except for s. 71.255. All other provisions of this
24chapter shall apply to insurance companies subject to taxation under this chapter
25unless the context clearly requires otherwise.
SB62, s. 177
1Section 177. 71.45 (2) (a) 10. of the statutes is amended to read:
SB62,99,82 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
3computed under s. 71.47 (1dd) to (1dx) (1dy), (3h), (3n), (3p), (3r), (3w), (5e), (5f), (5g),
4(5h), (5i), (5j), and (5k) and not passed through by a partnership, limited liability
5company, or tax-option corporation that has added that amount to the partnership's,
6limited liability company's, or tax-option corporation's income under s. 71.21 (4) or
771.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), and
8(5).
SB62, s. 178 9Section 178. 71.45 (2) (a) 16. of the statutes is amended to read:
SB62,99,1410 71.45 (2) (a) 16. By adding to federal taxable income any amount deducted or
11excluded under the Internal Revenue Code for interest expenses and, rental
12expenses, intangible expenses, and management fees that are directly or indirectly
13paid, accrued, or incurred to, or in connection directly or indirectly with one or more
14direct or indirect transactions with, one or more related entities.
SB62, s. 179 15Section 179. 71.45 (2) (a) 18. of the statutes is amended to read:
SB62,99,2116 71.45 (2) (a) 18. A deduction shall be allowed for the amount added, pursuant
17to subd. 16. or s. 71.05 (6) (a) 24., 71.26 (2) (a) 7., or 71.34 (1k) (j), to the federal income
18of a related entity that paid interest expenses or, rental expenses, intangible
19expenses, or management fees
to the insurer, to the extent that the related entity
20could not offset such amount with the deduction allowable under subd. 17. or s. 71.05
21(6) (b) 45., 71.26 (2) (a) 8., or 71.34 (1k) (k).
SB62, s. 180 22Section 180. 71.47 (1dy) of the statutes is created to read:
SB62,99,2523 71.47 (1dy) Economic development tax credit. (a) Definition. In this
24subsection, "claimant" means a person who files a claim under this subsection and
25is certified under s. 560.701 (2) and authorized to claim tax benefits under s. 560.703.
SB62,100,4
1(b) Filing claims. Subject to the limitations under this subsection and ss.
2560.701 to 560.706, for taxable years beginning after December 31, 2008, a claimant
3may claim as a credit against the tax imposed under s. 71.43, up to the amount of the
4tax, the amount authorized for the claimant under s. 560.703.
SB62,100,85 (c) Limitations. 1. No credit may be allowed under this subsection unless the
6claimant includes with the claimant's return a copy of the claimant's certification
7under s. 560.701 (2) and a copy of the claimant's notice of eligibility to receive tax
8benefits under s. 560.703 (3).
SB62,100,169 2. Partnerships, limited liability companies, and tax-option corporations may
10not claim the credit under this subsection, but the eligibility for, and the amount of,
11the credit are based on their authorization to claim tax benefits under s. 560.703.
12A partnership, limited liability company, or tax-option corporation shall compute
13the amount of credit that each of its partners, members, or shareholders may claim
14and shall provide that information to each of them. Partners, members of limited
15liability companies, and shareholders of tax-option corporations may claim the
16credit in proportion to their ownership interests.
SB62,100,1817 (d) Administration. 1. Except as provided in subd. 2., sub. (4) (e) and (f), as it
18applies to the credit under sub. (4), applies to the credit under this subsection.
SB62,101,219 2. If a claimant's certification is revoked under s. 560.705, or if a claimant
20becomes ineligible for tax benefits under s. 560.702, the claimant may not claim
21credits under this subsection for the taxable year that includes the day on which the
22certification is revoked; the taxable year that includes the day on which the claimant
23becomes ineligible for tax benefits; or succeeding taxable years and the claimant may
24not carry over unused credits from previous years to offset the tax imposed under s.
2571.43 for the taxable year that includes the day on which certification is revoked; the

1taxable year that includes the day on which the claimant becomes ineligible for tax
2benefits; or succeeding taxable years.
SB62,101,43 3. Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies
4to the credit under this subsection.
SB62, s. 181 5Section 181. 71.47 (3p) (a) 1m. of the statutes is created to read:
SB62,101,76 71.47 (3p) (a) 1m. "Dairy cooperative" means a business organized under ch.
7185 or 193 for the purpose of obtaining or processing milk.
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