LRB-1550/3
JK:jld:md
2009 - 2010 LEGISLATURE
February 18, 2009 - Introduced by Senators Lassa, Darling, Kreitlow, Coggs,
Taylor, Plale, Harsdorf, Lazich, Hopper and Schultz, cosponsored by
Representatives Fields, Zipperer, Hebl, Strachota, Sinicki, Ballweg, Davis,
A. Ott and Nass. Referred to Committee on Economic Development.
SB63,1,4
1An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a) 4., 71.34 (1k) (g), 71.45
2(2) (a) 10. and 77.92 (4); and
to create 71.07 (5r), 71.10 (4) (cd), 71.28 (5r), 71.30
3(3) (cd), 71.47 (5r) and 71.49 (1) (cd) of the statutes;
relating to: a
4postsecondary education tax credit for businesses.
Analysis by the Legislative Reference Bureau
This bill creates an income tax and franchise tax credit for businesses that pay
tuition for an individual to attend a university, college, or technical college. Sole
proprietorships, corporations, and insurers may claim the credit. Partnerships,
limited liability companies, and tax-option corporations compute the credit but pass
it on to the partners, members, and shareholders in proportion to their ownership
interests. The credit is an amount equal to: 1) 25 percent of the tuition paid by a
business for an individual to attend school, if the individual is enrolled in a course
of instruction approved by the Educational Approval Board; and 2) 30 percent of the
tuition paid by a business for an individual to attend school, if the individual is
enrolled in a course of instruction that relates to a projected worker shortage in this
state. The taxpayer claims the total amount of the tuition paid for the individual for
the taxable year in which the individual graduates from the course of instruction.
If the credit claimed by a business exceeds the business's tax liability, the state will
not issue a refund check, but the business may carry forward any remaining credit
to subsequent taxable years.
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:
SB63, s. 1
1Section
1. 71.05 (6) (a) 15. of the statutes is amended to read:
SB63,2,72
71.05
(6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
3(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3h), (3n), (3p), (3s), (3t), (3w), (5e),
4(5f), (5h), (5i), (5j),
and, (5k)
, and (5r) and not passed through by a partnership,
5limited liability company, or tax-option corporation that has added that amount to
6the partnership's, company's, or tax-option corporation's income under s. 71.21 (4)
7or 71.34 (1k) (g).
SB63, s. 2
8Section
2. 71.07 (5r) of the statutes is created to read:
SB63,2,109
71.07
(5r) Postsecondary education credit. (a)
Definitions. In this
10subsection:
SB63,2,1311
1. "Claimant" means a sole proprietor, a partner, a member of a limited liability
12company, or a shareholder of a tax-option corporation who files a claim under this
13subsection.
SB63,2,1514
2. "Course of instruction" means a course of instruction, as defined in s. 38.50
15(1) (c), that is approved by the educational approval board under s. 38.50.
SB63,2,1616
3. "Family member" has the meaning given in s. 157.061 (7).
SB63,2,1917
4. "Managing employee" means an individual who wholly or partially exercises
18operational or managerial control over, or who directly or indirectly conducts, the
19operation of the claimant's business.
SB63,2,2120
5. "Paid or incurred" includes any amount paid by the claimant to reimburse
21an individual for the tuition that the individual paid or incurred.
SB63,3,1
16. "Qualified postsecondary institution" means all of the following:
SB63,3,42
a. A University of Wisconsin System institution, a technical college system
3institution, or a regionally accredited 4-year nonprofit college or university having
4its regional headquarters and principal place of business in this state.
SB63,3,65
b. A school approved under s. 38.50, if the delivery of education occurs in this
6state.
SB63,3,97
(b)
Filing claims. Subject to the limitations provided in this subsection, a
8claimant may claim as a credit against the tax imposed under s. 71.02 an amount
9equal to the following:
SB63,3,1210
1. Twenty-five percent of the tuition that the claimant paid or incurred for an
11individual to participate in an education program of a qualified postsecondary
12institution, if the individual was enrolled in a course of instruction.
SB63,3,1713
2. Thirty percent of the tuition that the claimant paid or incurred for an
14individual to participate in an education program of a qualified postsecondary
15institution, if the individual was enrolled in a course of instruction that relates to a
16projected worker shortage in this state, as determined by the local workforce
17development boards established under
29 USC 2832.
SB63,3,2018
(c)
Limitations. 1. No credit may be allowed under par. (b) unless the claimant
19certifies to the department of revenue that the claimant will not be reimbursed for
20any amount of tuition for which the claimant claims a credit under par. (b).
SB63,3,2321
2. A claimant may not claim the credit under par. (b) for any tuition amounts
22that the claimant excluded under s. 71.05 (6) (b) 28. or under section
127 of the
23Internal Revenue Code.
SB63,4,3
13. A claimant may not claim the credit under par. (b) for any tuition amounts
2that the claimant paid or incurred for a family member of the claimant or for a family
3member of a managing employee unless all of the following apply:
SB63,4,74
a. The family member was employed an average of at least 20 hours per week
5as an employee of the claimant, or the claimant's business, during the one-year
6period prior to commencing participation in the education program in connection
7with which the claimant claims a credit under par. (b).
SB63,4,98
b. The family member is enrolled in a course of instruction that is substantially
9related to the claimant's business.
SB63,4,1310
4. The claimant shall claim the credit for the taxable year in which the
11individual graduates from a course of instruction in an amount equal to the total
12amount the claimant paid or incurred under par. (b) for all taxable years in which
13the claimant paid or incurred such amounts related to that individual.
SB63,4,2114
5. Partnerships, limited liability companies, and tax-option corporations may
15not claim the credit under this subsection, but the eligibility for, and the amount of,
16the credit are based on their payment of tuition under par. (b). A partnership, limited
17liability company, or tax-option corporation shall compute the amount of credit that
18each of its partners, members, or shareholders may claim and shall provide that
19information to each of them. Partners, members of limited liability companies, and
20shareholders of tax-option corporations may claim the credit in proportion to their
21ownership interest.
SB63,4,2322
(d)
Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
23s. 71.28 (4), applies to the credit under this subsection.
SB63, s. 3
24Section
3. 71.10 (4) (cd) of the statutes is created to read:
SB63,4,2525
71.10
(4) (cd) Postsecondary education credit under s. 71.07 (5r).
SB63, s. 4
1Section
4. 71.21 (4) of the statutes is amended to read:
SB63,5,52
71.21
(4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
3(2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3h), (3n), (3p), (3s), (3t), (3w), (5e), (5f), (5g),
4(5h), (5i), (5j),
and, (5k)
, and (5r) and passed through to partners shall be added to
5the partnership's income.
SB63, s. 5
6Section
5. 71.26 (2) (a) 4. of the statutes is amended to read:
SB63,5,127
71.26
(2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd),
8(1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3g), (3h), (3n), (3p), (3t), (3w), (5e), (5f),
9(5g), (5h), (5i), (5j),
and, (5k)
, and (5r) and not passed through by a partnership,
10limited liability company, or tax-option corporation that has added that amount to
11the partnership's, limited liability company's, or tax-option corporation's income
12under s. 71.21 (4) or 71.34 (1k) (g).
SB63, s. 6
13Section
6. 71.28 (5r) of the statutes is created to read:
SB63,5,1514
71.28
(5r) Postsecondary education credit. (a)
Definitions. In this
15subsection:
SB63,5,1616
1. "Claimant" means a corporation that files a claim under this subsection.
SB63,5,1817
2. "Course of instruction" means a course of instruction, as defined in s. 38.50
18(1) (c), that is approved by the educational approval board under s. 38.50.
SB63,5,1919
3. "Family member" has the meaning given in s. 157.061 (7).
SB63,5,2220
4. "Managing employee" means an individual who wholly or partially exercises
21operational or managerial control over, or who directly or indirectly conducts, the
22operation of the claimant's business.
SB63,5,2423
5. "Paid or incurred" includes any amount paid by the claimant to reimburse
24an individual for the tuition that the individual paid or incurred.
SB63,5,2525
6. "Qualified postsecondary institution" means all of the following:
SB63,6,3
1a. A University of Wisconsin System institution, a technical college system
2institution, or a regionally accredited 4-year nonprofit college or university having
3its regional headquarters and principal place of business in this state.
SB63,6,54
b. A school approved under s. 38.50, if the delivery of education occurs in this
5state.
SB63,6,86
(b)
Filing claims. Subject to the limitations provided in this subsection, a
7claimant may claim as a credit against the tax imposed under s. 71.23 an amount
8equal to the following:
SB63,6,119
1. Twenty-five percent of the tuition that the claimant paid or incurred for an
10individual to participate in an education program of a qualified postsecondary
11institution, if the individual was enrolled in a course of instruction.
SB63,6,1612
2. Thirty percent of the tuition that the claimant paid or incurred for an
13individual to participate in an education program of a qualified postsecondary
14institution, if the individual was enrolled in a course of instruction that relates to a
15projected worker shortage in this state, as determined by the local workforce
16development boards established under
29 USC 2832.
SB63,6,1917
(c)
Limitations. 1. No credit may be allowed under par. (b) unless the claimant
18certifies to the department of revenue that the claimant will not be reimbursed for
19any amount of tuition for which the claimant claims a credit under par. (b).
SB63,6,2120
2. A claimant may not claim the credit under par. (b) for any tuition amounts
21that the claimant has excluded under section
127 of the Internal Revenue Code.
SB63,6,2422
3. A claimant may not claim the credit under par. (b) for any tuition amounts
23that the claimant paid or incurred for a family member of a managing employee
24unless all of the following apply:
SB63,7,4
1a. The family member was employed an average of at least 20 hours per week
2as an employee of the claimant, or the claimant's business, during the one-year
3period prior to commencing participation in the education program in connection
4with which the claimant claims a credit under par. (b).
SB63,7,65
b. The family member is enrolled in a course of instruction that is substantially
6related to the claimant's business.
SB63,7,107
4. The claimant shall claim the credit for the taxable year in which the
8individual graduates from a course of instruction in an amount equal to the total
9amount the claimant paid or incurred under par. (b) for all taxable years in which
10the claimant paid or incurred such amounts related to that individual.
SB63,7,1811
5. Partnerships, limited liability companies, and tax-option corporations may
12not claim the credit under this subsection, but the eligibility for, and the amount of,
13the credit are based on their payment of tuition under par. (b). A partnership, limited
14liability company, or tax-option corporation shall compute the amount of credit that
15each of its partners, members, or shareholders may claim and shall provide that
16information to each of them. Partners, members of limited liability companies, and
17shareholders of tax-option corporations may claim the credit in proportion to their
18ownership interest.
SB63,7,2019
(d)
Administration. Subsection (4) (e) to (h), as it applies to the credit under
20sub. (4), applies to the credit under this subsection.
SB63, s. 7
21Section
7. 71.30 (3) (cd) of the statutes is created to read:
SB63,7,2222
71.30
(3) (cd) Postsecondary education credit under s. 71.28 (5r).
SB63, s. 8
23Section
8. 71.34 (1k) (g) of the statutes is amended to read:
SB63,8,224
71.34
(1k) (g) An addition shall be made for credits computed by a tax-option
25corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), (3g),
1(3h), (3n), (3p), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j),
and, (5k)
, and (5r) and passed
2through to shareholders.
SB63, s. 9
3Section
9. 71.45 (2) (a) 10. of the statutes is amended to read:
SB63,8,104
71.45
(2) (a) 10. By adding to federal taxable income the amount of credit
5computed under s. 71.47 (1dd) to (1dx), (3h), (3n), (3p), (3w), (5e), (5f), (5g), (5h), (5i),
6(5j),
and, (5k)
, and (5r) and not passed through by a partnership, limited liability
7company, or tax-option corporation that has added that amount to the partnership's,
8limited liability company's, or tax-option corporation's income under s. 71.21 (4) or
971.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), and
10(5).