Amendment JR1 ASA4-AB7

LRBs0039/1

JK:jld:ph

January 2011 Special Session

2011 - 2012 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 4, TO ASSEMBLY BILL 7

January 25, 2011 - Offered by Representative Hintz.

AB7-ASA4,1,2 An Act to create 71.645 and 560.2057 of the statutes; relating to: tax benefits for hiring new employees and granting rule-making authority.

Analysis by the Legislative Reference Bureau

Under this substitute amendment, generally, a business that hires new full-time employees may begin to receive a tax benefit, if it applies to the Department of Commerce to receive that benefit. Under the substitute amendment, an eligible business may, rather than submit the amount as withholding taxes, retain an amount that is equal to the increase in the business's payroll attributable to new employees with full-time jobs. A business is only eligible for the tax benefits if it employs no more than ten employees during the year. Under the substitute amendment, the Department of Revenue (DOR) considers all amounts retained as tax benefits to be amounts submitted to DOR as withholding taxes.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB7-ASA4, s. 1 Section 1. 71.645 of the statutes is created to read:

AB7-ASA4,2,7 71.645 Job creation tax benefit. Subject to the limitations provided in this section and s. 560.2057, and notwithstanding any other provision in this subchapter, for taxable years beginning after December 31, 2010, a person who is certified to receive tax benefits under s. 560.2057 (2) may, rather than submit the income withholding taxes of any eligible employees, as defined under s. 560.2057 (1) (b), retain those taxes as a tax benefit. The person shall report this amount to the department, in the manner prescribed by the department, and, for purposes of this chapter, the department shall treat all amounts retained under this section as if the amounts had been withheld pursuant to this subchapter.

AB7-ASA4, s. 2 Section 2. 560.2057 of the statutes is created to read:

AB7-ASA4,2,9 560.2057 Job creation tax benefit. (1) Definitions. In this section:

AB7-ASA4,2,12 (a) "Business" means any organization or enterprise operated for profit, including a proprietorship, partnership, firm, business trust, joint venture, syndicate, corporation, limited liability company, or association.

AB7-ASA4,2,14 (b) "Eligible employee" means an individual employed in a full-time job by a person certified in sub. (2), if all of the following apply:

AB7-ASA4,2,16 1. The individual begins employment with the person certified in sub. (2) after February 3, 2011, and before January 1, 2012.

AB7-ASA4,2,20 2. The individual certifies to the department, in the manner prescribed by the department, that the individual has not been employed for more than 40 hours during the 60-day period ending on the date that the individual begins his or her employment with the person certified in sub. (2).

AB7-ASA4,2,24 3. The individual is not employed by the person certified in sub. (2) to replace another employee of the person unless the other employee separated from his or her employment with the person voluntarily or unless person terminated the other employee for cause.

AB7-ASA4,2,25 4. The individual is not an individual described in 26 USC 51 (i) (1).

AB7-ASA4,3,4 (c) "Full-time job" means a regular, nonseasonal full-time position, in this state, in which an individual, as a condition of employment, is required to work at least 2,080 hours per year, including paid leave and holidays. "Full-time job" does not include initial training before an employment position begins.

AB7-ASA4,3,5 (d) "Tax benefits" means the job creation tax benefit under s. 71.645.

AB7-ASA4,3,7 (2) Certification. The department may certify a person to receive tax benefits under this section if all of the following apply:

AB7-ASA4,3,8 (a) The person is operating or intends to operate a business in this state.

AB7-ASA4,3,10 (b) The person's business employs no more than 10 employees during the taxable year for which the person seeks to claim tax benefits under this section.

AB7-ASA4,3,11 (c) The person applies under this section.

AB7-ASA4,3,14 (3) Limitations. (a) A person may not claim the tax benefits under this section and the tax credits under ss. 71.07 (3q), 71.28 (3q), and 71.47 (3q) for amounts related to the same employees.

AB7-ASA4,3,16 (b) The maximum amount of tax benefits that may be awarded under this section is $10,000,000.

AB7-ASA4,3,20 (c) If an eligible employee does not work for the person certified under sub. (2) for at least 30 days during the taxable year for which the person receives the tax benefits, the person shall repay the amount of the tax benefits received for that employee in the manner prescribed by rule by the department.

AB7-ASA4,3,23 (4) Duties of the department. (a) The department of commerce shall notify the department of revenue when the department of commerce certifies a person to receive tax benefits.

AB7-ASA4,3,25 (b) The department of commerce shall notify the department of revenue within 30 days of revoking a certification made under sub. (2).

AB7-ASA4,4,2 (c) The department shall annually verify the information submitted to the department by the person claiming tax benefits under s. 71.645.

AB7-ASA4,4,5 (d) The department shall promulgate rules for the implementation and operation of this section, including rules relating to the conditions for the revocation of a certification under par. (b).

AB7-ASA4, s. 3 Section 3. Nonstatutory provisions.

AB7-ASA4,4,16 (1) Job creation tax benefits. The department of commerce may use the procedure under section 227.24 of the statutes to promulgate rules under section 560.2057 (4) (d) of the statutes, as created by this act. Notwithstanding section 227.24 (1) (c) and (2) of the statutes, emergency rules promulgated under this subsection remain in effect until July 1, 2011, or the date on which permanent rules take effect, whichever is sooner. Notwithstanding section 227.24 (1) (a) and (3) of the statutes, the department is not required to provide evidence that promulgating a rule under this subsection as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of emergency for a rule promulgated under this subsection.

AB7-ASA4,4,23 (2) Rules. Notwithstanding sections 227.137 (2) and 227.138 (2) of the statutes, if the secretary of administration requires the department of commerce to prepare an economic impact report for the rules required under section 560.2057 (4) (d) of the statutes, as created by this act, the department may submit the proposed rules to the legislature for review under section 227.19 (2) of the statutes before the department completes the economic impact report and before the department receives a copy of the report and approval under section 227.138 (2) of the statutes.

AB7-ASA4,4,24 (End)