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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.
SB62, s. 182 8Section 182. 71.47 (3p) (a) 3. (intro.) of the statutes is amended to read:
SB62,101,159 71.47 (3p) (a) 3. (intro.) "Dairy manufacturing modernization or expansion"
10means constructing, improving, or acquiring buildings or facilities, or acquiring
11equipment, for dairy manufacturing, including the following, if used exclusively for
12dairy manufacturing and if acquired and placed in service in this state during
13taxable years that begin after December 31, 2006, and before January 1, 2015, or, in
14the case of dairy cooperatives, if acquired and placed in service in this state during
15taxable years that begin after December 31, 2008, and before January 1, 2017
:
SB62, s. 183 16Section 183. 71.47 (3p) (b) of the statutes is amended to read:
SB62,101,2317 71.47 (3p) (b) Filing claims. Subject to the limitations provided in this
18subsection and s. 560.207, except as provided in par. (c) 5., for taxable years
19beginning after December 31, 2006, and before January 1, 2015, a claimant may
20claim as a credit against the taxes imposed under s. 71.43, up to the amount of the
21tax, an amount equal to 10 percent of the amount the claimant paid in the taxable
22year for dairy manufacturing modernization or expansion related to the claimant's
23dairy manufacturing operation.
SB62, s. 184 24Section 184. 71.47 (3p) (c) 2m. b. of the statutes is amended to read:
SB62,102,4
171.47 (3p) (c) 2m. b. The maximum amount of the credits that may be claimed
2by all claimants, other than members of dairy cooperatives, under this subsection
3and ss. 71.07 (3p) and 71.28 (3p) in fiscal year 2008-09, and in each fiscal year
4thereafter, is $700,000, as allocated under s. 560.207.
SB62, s. 185 5Section 185. 71.47 (3p) (c) 2m. bm. of the statutes is created to read:
SB62,102,126 71.47 (3p) (c) 2m. bm. The maximum amount of the credits that may be claimed
7by members of dairy cooperatives under this subsection and ss. 71.07 (3p) and 71.28
8(3p) in fiscal year 2009-10 is $600,000, as allocated under s. 560.207, and the
9maximum amount of the credits that may be claimed by members of dairy
10cooperatives under this subsection and ss. 71.07 (3p) and 71.28 (3p) in fiscal year
112010-11, and in each fiscal year thereafter, is $700,000, as allocated under s.
12560.207.
SB62, s. 186 13Section 186. 71.47 (3p) (c) 3. of the statutes is amended to read:
SB62,103,214 71.47 (3p) (c) 3. Partnerships, limited liability companies, and tax-option
15corporations, and dairy cooperatives may not claim the credit under this subsection,
16but the eligibility for, and the amount of, the credit are based on their payment of
17expenses under par. (b), except that the aggregate amount of credits that the entity
18may compute shall not exceed $200,000 for each of the entity's dairy manufacturing
19facilities
. A partnership, limited liability company, or tax-option corporation, or
20dairy cooperative
shall compute the amount of credit that each of its partners,
21members, or shareholders may claim and shall provide that information to each of
22them. Partners, members of limited liability companies, and shareholders of
23tax-option corporations may claim the credit in proportion to their ownership
24interest. Members of a dairy cooperative may claim the credit in proportion to the

1amount of milk that each member delivers to the dairy cooperative, as determined
2by the dairy cooperative.
SB62, s. 187 3Section 187. 71.47 (3p) (c) 5. of the statutes is created to read:
SB62,103,74 71.47 (3p) (c) 5. A claimant who is a member of a dairy cooperative may claim
5the credit, based on amounts described under par. (b) that are paid by the dairy
6cooperative, for taxable years beginning after December 31, 2008, and before
7January 1, 2017.
SB62, s. 188 8Section 188. 71.47 (3p) (c) 6. of the statutes is created to read:
SB62,103,119 71.47 (3p) (c) 6. No credit may be allowed under this subsection unless the
10claimant submits with the claimant's return a copy of the claimant's credit
11certification and allocation under s. 560.207.
SB62, s. 189 12Section 189. 71.47 (3p) (d) 2. of the statutes is amended to read:
SB62,103,1813 71.47 (3p) (d) 2. If Except as provided in subd. 3., if the allowable amount of
14the claim under par. (b) exceeds the tax otherwise due under s. 71.43 or no tax is due
15under s. 71.43
, the amount of the claim not used to offset the tax due shall be certified
16by the department of revenue to the department of administration for payment by
17check, share draft, or other draft drawn from the appropriation account under s.
1820.835 (2) (bn).
SB62, s. 190 19Section 190. 71.47 (3p) (d) 3. of the statutes is created to read:
SB62,103,2520 71.47 (3p) (d) 3. With regard to claims that are based on amounts described
21under par. (b) that are paid by a dairy cooperative, if the allowable amount of the
22claim under par. (b) exceeds the tax otherwise due under s. 71.43, the amount of the
23claim not used to offset the tax due shall be certified by the department of revenue
24to the department of administration for payment by check, share draft, or other draft
25drawn from the appropriation account under s. 20.835 (2) (bp).
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