2011 - 2012 LEGISLATURE
November 1, 2011 - Introduced by Representatives Pocan, Berceau, Bernard
Schaber, Fields, Grigsby, Hebl, Mason, Milroy, Pasch, Ringhand, Roys,
and C. Taylor, cosponsored by Senators Risser and Hansen. Referred
to Committee on Jobs, Economy and Small Business.
AB356,1,2 1An Act to amend 71.26 (3) (e) 1. of the statutes; relating to: limiting the
2corporate income tax deduction for compensation paid to an employee.
Analysis by the Legislative Reference Bureau
Under current law, a corporation may deduct from its income tax the
compensation paid to its officers and employees. The corporate income tax deduction
for compensation paid to executive officers cannot exceed $1,000,000, unless the
compensation is performance-based.
This bill further limits any single corporate income tax deduction for
compensation paid to an employee or officer to an amount not to exceed the
compensation paid to a corporation's lowest-paid full-time employee multiplied by
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:
AB356, s. 1 3Section 1. 71.26 (3) (e) 1. of the statutes is amended to read:
AB356,2,64 71.26 (3) (e) 1. So that payments for wages, salaries, commissions, and bonuses
5of employees and officers may be deducted only if the name, address and amount paid

1to each resident of this state to whom compensation of $600 or more has been paid
2during the taxable year is reported or if the department of revenue is satisfied that
3failure to report has resulted in no revenue loss to this state. A deduction for wages,
4salaries, commissions, and bonuses paid to an employee or officer shall not exceed
5an amount equal to the sum of the wages, salaries, commissions, and bonuses paid
6to the corporation's lowest-paid full-time employee, multiplied by 25.
AB356, s. 2 7Section 2. Initial applicability.
AB356,2,88 (1) This act first applies to taxable years beginning on January 1, 2011.
AB356,2,99 (End)