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SB62,44,6
171.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
2(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t),
3(3w), (5e), (5f), (5h), (5i), (5j), and (5k) and not passed through by a partnership,
4limited liability company, or tax-option corporation that has added that amount to
5the partnership's, company's, or tax-option corporation's income under s. 71.21 (4)
6or 71.34 (1k) (g).
SB62, s. 86 7Section 86. 71.05 (6) (a) 24. of the statutes is amended to read:
SB62,44,128 71.05 (6) (a) 24. The amount deducted or excluded under the Internal Revenue
9Code for interest expenses and, rental expenses, intangible expenses, and
10management fees
that are directly or indirectly paid, accrued, or incurred to, or in
11connection directly or indirectly with one or more direct or indirect transactions with,
12one or more related entities.
SB62, s. 87 13Section 87. 71.05 (6) (b) 46. of the statutes is amended to read:
SB62,44,1914 71.05 (6) (b) 46. An amount added, pursuant to par. (a) 24. or s. 71.26 (2) (a) 7.,
1571.34 (1k) (j), or 71.45 (2) (a) 16., to the federal income of a related entity that paid
16interest expenses or, rental expenses , intangible expenses, or management fees to
17the individual or fiduciary, to the extent that the related entity could not offset such
18amount with the deduction allowable under subd. 45. or s. 71.26 (2) (a) 8., 71.34 (1k)
19(k), or 71.45 (2) (a) 17.
SB62, s. 88 20Section 88. 71.07 (2dr) (a) of the statutes is amended to read:
SB62,45,1821 71.07 (2dr) (a) Credit. Any person may credit against taxes otherwise due
22under this chapter an amount equal to 5% of the amount obtained by subtracting
23from the person's qualified research expenses, as defined in section 41 of the internal
24revenue code, except that "qualified research expenses" include only expenses
25incurred by the claimant in a development zone under subch. VI of ch. 560, except

1that a taxpayer may elect the alternative computation under section 41 (c) (4) of the
2Internal Revenue Code and that election applies until the department permits its
3revocation and except that "qualified research expenses" do not include
4compensation used in computing the credit under sub. (2dj) nor research expenses
5incurred before the claimant is certified for tax benefits under s. 560.765 (3), the
6person's base amount, as defined in section 41 (c) of the internal revenue code, in a
7development zone, except that gross receipts used in calculating the base amount
8means gross receipts from sales attributable to Wisconsin under s. 71.04 (7) (b) 1. and
92., (d), (df) 1. and 2., and (dh) 1., 2., and 3., (dj) 1. and (dk) 1. and research expenses
10used in calculating the base amount include research expenses incurred before the
11claimant is certified for tax benefits under s. 560.765 (3), in a development zone, if
12the claimant submits with the claimant's return a copy of the claimant's certification
13for tax benefits under s. 560.765 (3) and a statement from the department of
14commerce verifying the claimant's qualified research expenses for research
15conducted exclusively in a development zone. The rules under s. 73.03 (35) apply to
16the credit under this paragraph. The rules under sub. (2di) (f) and (g), as they apply
17to the credit under that subsection, apply to claims under this paragraph. Section
1841 (h) of the internal revenue code does not apply to the credit under this paragraph.
SB62, s. 89 19Section 89. 71.07 (2dy) of the statutes is created to read:
SB62,45,2220 71.07 (2dy) Economic development tax credit. (a) Definition. In this
21subsection, "claimant" means a person who files a claim under this subsection and
22is certified under s. 560.701 (2) and authorized to claim tax benefits under s. 560.703.
SB62,46,223 (b) Filing claims. Subject to the limitations under this subsection and ss.
24560.701 to 560.706, for taxable years beginning after December 31, 2008, a claimant

1may claim as a credit against the tax imposed under s. 71.02 or 71.08, up to the
2amount of the tax, the amount authorized for the claimant under s. 560.703.
SB62,46,63 (c) Limitations. 1. No credit may be allowed under this subsection unless the
4claimant includes with the claimant's return a copy of the claimant's certification
5under s. 560.701 (2) and a copy of the claimant's notice of eligibility to receive tax
6benefits under s. 560.703 (3).
SB62,46,147 2. Partnerships, limited liability companies, and tax-option corporations may
8not claim the credit under this subsection, but the eligibility for, and the amount of,
9the credit are based on their authorization to claim tax benefits under s. 560.703.
10A partnership, limited liability company, or tax-option corporation shall compute
11the amount of credit that each of its partners, members, or shareholders may claim
12and shall provide that information to each of them. Partners, members of limited
13liability companies, and shareholders of tax-option corporations may claim the
14credit in proportion to their ownership interests.
SB62,46,1715 (d) Administration. 1. Except as provided in subd. 2., s. 71.28 (4) (e) and (f),
16as it applies to the credit under s. 71.28 (4), applies to the credit under this
17subsection.
SB62,47,218 2. If a claimant's certification is revoked under s. 560.705, or if a claimant
19becomes ineligible for tax benefits under s. 560.702, the claimant may not claim
20credits under this subsection for the taxable year that includes the day on which the
21certification is revoked; the taxable year that includes the day on which the claimant
22becomes ineligible for tax benefits; or succeeding taxable years and the claimant may
23not carry over unused credits from previous years to offset the tax imposed under s.
2471.02 or 71.08 for the taxable year that includes the day on which certification is

1revoked; the taxable year that includes the day on which the claimant becomes
2ineligible for tax benefits; or succeeding taxable years.
SB62,47,43 3. Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4),
4applies to the credit under this subsection.
SB62, s. 90 5Section 90. 71.07 (3p) (a) 1m. of the statutes is created to read:
SB62,47,76 71.07 (3p) (a) 1m. "Dairy cooperative" means a business organized under ch.
7185 or 193 for the purpose of obtaining or processing milk.
SB62, s. 91 8Section 91. 71.07 (3p) (a) 3. (intro.) of the statutes is amended to read:
SB62,47,159 71.07 (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. 92 16Section 92. 71.07 (3p) (b) of the statutes is amended to read:
SB62,47,2317 71.07 (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. 71.02 or 71.08, up to the amount
21of the tax, an amount equal to 10 percent of the amount the claimant paid in the
22taxable year for dairy manufacturing modernization or expansion related to the
23claimant's dairy manufacturing operation.
SB62, s. 93 24Section 93. 71.07 (3p) (c) 2m. b. of the statutes is amended to read:
SB62,48,4
171.07 (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. 71.28 (3p) and 71.47 (3p) in fiscal year 2008-09, and in each fiscal year
4thereafter, is $700,000, as allocated under s. 560.207.
SB62, s. 94 5Section 94. 71.07 (3p) (c) 2m. bm. of the statutes is created to read:
SB62,48,126 71.07 (3p) (c) 2m. bm. The maximum amount of the credits that may be claimed
7by members of dairy cooperatives under this subsection and ss. 71.28 (3p) and 71.47
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. 71.28 (3p) and 71.47 (3p) in fiscal year
112010-11, and in each fiscal year thereafter, is $700,000, as allocated under s.
12560.207.
SB62, s. 95 13Section 95. 71.07 (3p) (c) 3. of the statutes is amended to read:
SB62,49,214 71.07 (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. 96 3Section 96. 71.07 (3p) (c) 5. of the statutes is created to read:
SB62,49,74 71.07 (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. 97 8Section 97. 71.07 (3p) (c) 6. of the statutes is created to read:
SB62,49,119 71.07 (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. 98 12Section 98. 71.07 (3p) (d) 2. of the statutes is amended to read:
SB62,49,1813 71.07 (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. 71.02 or 71.08 or no
15tax is due under s. 71.02 or 71.08
, the amount of the claim not used to offset the tax
16due shall be certified by the department of revenue to the department of
17administration for payment by check, share draft, or other draft drawn from the
18appropriation account under s. 20.835 (2) (bn).
SB62, s. 99 19Section 99. 71.07 (3p) (d) 3. of the statutes is created to read:
SB62,49,2520 71.07 (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. 71.02 or 71.08, the
23amount of the claim not used to offset the tax due shall be certified by the department
24of revenue to the department of administration for payment by check, share draft,
25or other draft drawn from the appropriation account under s. 20.835 (2) (bp).
SB62, s. 100
1Section 100. 71.07 (3r) of the statutes is created to read:
SB62,50,32 71.07 (3r) Meat processing facility investment credit. (a) Definitions. In this
3subsection:
SB62,50,44 1. "Claimant" means a person who files a claim under this subsection.
SB62,50,65 2. "Meat processing" means processing livestock into meat products or
6processing meat products for sale commercially.
SB62,50,117 3. "Meat processing modernization or expansion" means constructing,
8improving, or acquiring buildings or facilities, or acquiring equipment, for meat
9processing, including the following, if used exclusively for meat processing and if
10acquired and placed in service in this state during taxable years that begin after
11December 31, 2008, and before January 1, 2017:
SB62,50,1312 a. Building construction, including livestock handling, product intake, storage,
13and warehouse facilities.
SB62,50,1414 b. Building additions.
SB62,50,1615 c. Upgrades to utilities, including water, electric, heat, refrigeration, freezing,
16and waste facilities.
SB62,50,1717 d. Livestock intake and storage equipment.
SB62,50,2018 e. Processing and manufacturing equipment, including cutting equipment,
19mixers, grinders, sausage stuffers, meat smokers, curing equipment, cooking
20equipment, pipes, motors, pumps, and valves.
SB62,50,2221 f. Packaging and handling equipment, including sealing, bagging, boxing,
22labeling, conveying, and product movement equipment.
SB62,50,2323 g. Warehouse equipment, including storage and curing racks.
SB62,51,3
1h. Waste treatment and waste management equipment, including tanks,
2blowers, separators, dryers, digesters, and equipment that uses waste to produce
3energy, fuel, or industrial products.
SB62,51,74 i. Computer software and hardware used for managing the claimant's meat
5processing operation, including software and hardware related to logistics,
6inventory management, production plant controls, and temperature monitoring
7controls.
SB62,51,98 4. "Used exclusively" means used to the exclusion of all other uses except for
9use not exceeding 5 percent of total use.
SB62,51,1510 (b) Filing claims. Subject to the limitations provided in this subsection and s.
11560.208, for taxable years beginning after December 31, 2008, and before January
121, 2017, a claimant may claim as a credit against the taxes imposed under s. 71.02
13or 71.08, up to the amount of the tax, an amount equal to 10 percent of the amount
14the claimant paid in the taxable year for meat processing modernization or
15expansion related to the claimant's meat processing operation.
SB62,51,1816 (c) Limitations. 1. No credit may be allowed under this subsection for any
17amount that the claimant paid for expenses described under par. (b) that the
18claimant also claimed as a deduction under section 162 of the Internal Revenue Code.
SB62,51,2019 2. The aggregate amount of credits that a claimant may claim under this
20subsection is $200,000.
SB62,51,2321 3. a. The maximum amount of the credits that may be allocated under this
22subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2009-10 is $300,000, as
23allocated under s. 560.208.
SB62,52,3
1b. The maximum amount of the credits that may be allocated under this
2subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2010-11, and in each fiscal
3year thereafter, is $700,000, as allocated under s. 560.208.
SB62,52,124 4. Partnerships, limited liability companies, and tax-option corporations may
5not claim the credit under this subsection, but the eligibility for, and the amount of,
6the credit are based on their payment of expenses under par. (b), except that the
7aggregate amount of credits that the entity may compute shall not exceed $200,000.
8A partnership, limited liability company, or tax-option corporation shall compute
9the amount of credit that each of its partners, members, or shareholders may claim
10and shall provide that information to each of them. Partners, members of limited
11liability companies, and shareholders of tax-option corporations may claim the
12credit in proportion to their ownership interest.
SB62,52,1613 5. If 2 or more persons own and operate the meat processing operation, each
14person may claim a credit under par. (b) in proportion to his or her ownership
15interest, except that the aggregate amount of the credits claimed by all persons who
16own and operate the meat processing operation shall not exceed $200,000.
SB62,52,1917 6. No credit may be allowed under this subsection unless the claimant submits
18with the claimant's return a copy of the claimant's credit certification and allocation
19under s. 560.208.
SB62,52,2120 (d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the
21credit under s. 71.28 (4), applies to the credit under this subsection.
SB62,53,222 2. If the allowable amount of the claim under par. (b) exceeds the tax otherwise
23due under s. 71.02 or 71.08, the amount of the claim not used to offset the tax due
24shall be certified by the department of revenue to the department of administration

1for payment by check, share draft, or other draft drawn from the appropriation
2account under s. 20.835 (2) (bd).
SB62, s. 101 3Section 101. 71.07 (5b) (c) 1. of the statutes is repealed.
SB62, s. 102 4Section 102. 71.07 (5b) (c) 2. of the statutes is renumbered 71.07 (5b) (c).
SB62, s. 103 5Section 103. 71.07 (5d) (b) of the statutes is renumbered 71.07 (5d) (b) (intro.)
6and amended to read:
SB62,53,97 71.07 (5d) (b) Filing claims. (intro.) Subject to the limitations provided in this
8subsection and in s. 560.205, a claimant may claim as a credit against the tax
9imposed under s. 71.02 or 71.08, up to the amount of those taxes, the following:
SB62,53,13 101. For taxable years beginning before January 1, 2008, in each taxable year for
112 consecutive years, beginning with the taxable year as certified by the department
12of commerce, an amount equal to 12.5 percent of the claimant's bona fide angel
13investment made directly in a qualified new business venture.
SB62, s. 104 14Section 104. 71.07 (5d) (b) 2. of the statutes is created to read:
SB62,53,1815 71.07 (5d) (b) 2. For taxable years beginning after December 31, 2007, for the
16taxable year certified by the department of commerce, an amount equal to 25 percent
17of the claimant's bona fide angel investment made directly in a qualified new
18business venture.
SB62, s. 105 19Section 105. 71.07 (5d) (c) 2. of the statutes is amended to read:
SB62,53,2320 71.07 (5d) (c) 2. The For taxable years beginning before January 1, 2008, the
21maximum amount of a claimant's investment that may be used as the basis for a
22credit under this subsection is $2,000,000 for each investment made directly in a
23business certified under s. 560.205 (1).
SB62, s. 106 24Section 106. 71.07 (5e) (b) of the statutes is amended to read:
SB62,54,8
171.07 (5e) (b) Filing claims. Subject to the limitations provided in this
2subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first
3taxable year following the taxable year in which the claimant claims an exemption
4a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against
5the taxes imposed under ss. 71.02 and 71.08, up to the amount of those taxes, in each
6taxable year for 2 years, the amount of sales and use tax certified by the department
7of commerce that resulted from the claimant claimed as an exemption claiming a
8deduction
under s. 77.54 (48) 77.585 (9).
SB62, s. 107 9Section 107. 71.07 (5e) (c) 1. of the statutes is amended to read:
SB62,54,1110 71.07 (5e) (c) 1. No credit may be allowed under this subsection unless the
11claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
SB62, s. 108 12Section 108. 71.07 (5e) (c) 3. of the statutes is amended to read:
SB62,54,1613 71.07 (5e) (c) 3. The total amount of the credits and exemptions the sales and
14use tax resulting from the deductions claimed under s. 77.585 (9)
that may be claimed
15by all claimants under this subsection and ss. 71.28 (5e), 71.47 (5e), and 77.54 (48)
1677.585 (9) is $7,500,000, as determined by the department of commerce.
SB62, s. 109 17Section 109. 71.08 (1) (intro.) of the statutes is amended to read:
SB62,55,218 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
19couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
20ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (2fd), (3m), (3n),
21(3p), (3r), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (6), (6e), and (9e), 71.28 (1dd), (1de),
22(1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w), and 71.47
23(1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w),
24and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than
25the tax under this section, there is imposed on that natural person, married couple

1filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative
2minimum tax computed as follows:
SB62, s. 110 3Section 110. 71.10 (1) of the statutes is amended to read:
SB62,55,154 71.10 (1) Allocation of gross income, deductions, credits between 2 or more
5businesses.
In any case of 2 or more organizations, trades or businesses (whether or
6not incorporated, whether or not organized in the United States and, whether or not
7affiliated, and whether or not unitary) owned or controlled directly or indirectly by
8the same interests, the secretary or the secretary's delegate may distribute,
9apportion or allocate gross income, deductions, credits or allowances between or
10among such organizations, trades or businesses, if the secretary determines that
11such distribution, apportionment or allocation is necessary in order to prevent
12evasion of taxes or clearly to reflect the income of any of such organizations, trades
13or businesses. The authority granted under this subsection is in addition to, and not
14a limitation of or dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45., 71.26
15(2) (a) 7. and 8., 71.34 (1k) (j) and (k), 71.45 (2) (a) 16. and 17., and 71.80 (23).
SB62, s. 111 16Section 111. 71.10 (1m) of the statutes is created to read:
SB62,55,2317 71.10 (1m) Transactions without economic substance. (a) If any person,
18directly or indirectly, engages in a transaction or series of transactions without
19economic substance to create a loss or to reduce taxable income or to increase credits
20allowed in determining Wisconsin tax, the department shall determine the amount
21of a taxpayer's taxable income or tax so as to reflect what would have been the
22taxpayer's taxable income or tax if not for the transaction or transactions without
23economic substance causing the reduction in taxable income or tax.
SB62,55,2524 (b) A transaction has economic substance only if the taxpayer shows all of the
25following:
SB62,56,2
11. The transaction changes the taxpayer's economic position in a meaningful
2way, apart from federal, state, local, and foreign tax effects.
SB62,56,63 2. The taxpayer has a substantial nontax purpose for entering into the
4transaction and the transaction is a reasonable means of accomplishing the
5substantial nontax purpose. A transaction has a substantial nontax purpose if it has
6substantial potential for profit, disregarding any tax effects.
SB62,56,127 (c) With respect to transactions between members of a controlled group as
8defined in section 267 (f) (1) of the Internal Revenue Code, such transactions shall
9be presumed to lack economic substance and the taxpayer shall bear the burden of
10establishing by clear and convincing evidence that a transaction or a series of
11transactions between the taxpayer and one or more members of the controlled group
12has economic substance.
SB62, s. 112 13Section 112. 71.10 (4) (gv) of the statutes is created to read:
SB62,56,1414 71.10 (4) (gv) Economic development tax credit under s. 71.07 (2dy).
SB62, s. 113 15Section 113. 71.10 (4) (i) of the statutes is amended to read:
SB62,56,2416 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland
17preservation credit under subch. IX, homestead credit under subch. VIII, farmland
18tax relief credit under s. 71.07 (3m), farmers' drought property tax credit under s.
1971.07 (2fd), dairy manufacturing facility investment credit under s. 71.07 (3p), meat
20processing facility investment credit under s. 71.07 (3r),
film production services
21credit under s. 71.07 (5f) (b) 2., veterans and surviving spouses property tax credit
22under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), earned income tax
23credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld
24under subch. X.
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