LRB-1256/2
JK:sbb/nwn/wlj:jf
2011 - 2012 LEGISLATURE
June 7, 2011 - Introduced by Senators Grothman, Leibham, Kapanke, Galloway,
Darling, Lazich and
T. Cullen, cosponsored by Representatives Kooyenga,
Jacque, Knodl, Petryk, Brooks, LeMahieu, A. Ott, Kapenga, Thiesfeldt,
Litjens, Pridemore, Strachota, Stroebel, Wynn, Knilans and Endsley.
Referred to Committee on Public Health, Human Services, and Revenue.
SB123,1,4
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 (5n), 71.10 (4) (cr), 71.28 (5n), 71.30
3(3) (dn), 71.47 (5n) and 71.49 (1) (dn) of the statutes;
relating to: an income and
4franchise tax credit for qualified production activities income.
Analysis by the Legislative Reference Bureau
Under the federal Internal Revenue Code, a taxpayer may claim a deduction
equal to 9 percent of the taxpayer's qualified production activities income in the
taxable year or 9 percent of the taxpayer's total taxable income, whichever is less.
For federal tax purposes, qualified production activities income is, generally, the
amount of the taxpayer's domestic production gross receipts that exceed the sum of
the cost of goods sold and other expenses, losses, or deductions. Domestic production
gross receipts are, generally, gross receipts derived from property that was
manufactured, produced, grown, or extracted in the United States.
Under this bill, an individual taxpayer may claim a state income tax credit
equal to the taxpayer's qualified production activities income derived from
manufacturing property and agricultural property, multiplied by 7.5 percent. A
corporation or insurer may claim a state income and franchise tax credit equal to the
lesser of its taxable income apportioned to this state or its qualified production
activities income derived from manufacturing property or agricultural property,
multiplied by 7.5 percent.
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:
SB123, s. 1
1Section
1. 71.05 (6) (a) 15. of the statutes is amended to read:
SB123,2,72
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), (2dy), (3g), (3h), (3n), (3p), (3q), (3r),
4(3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k),
(5n), (5r), (5rm), and (8r) and
5not passed through by a partnership, limited liability company, or tax-option
6corporation that has added that amount to the partnership's, company's, or
7tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).
SB123, s. 2
8Section
2. 71.07 (5n) of the statutes is created to read:
SB123,2,109
71.07
(5n) Qualified production activities credit. (a)
Definitions. In this
10subsection:
SB123,2,1111
1. "Claimant" means a person who files a claim under this subsection.
SB123,2,1512
2. "Eligible qualified production activities income" means qualified production
13activities income that derives from property assessed as manufacturing property
14under s. 70.995 or property assessed as agricultural property under s. 70.32 (2) (a)
154.
SB123,2,1716
3. "Qualified production activities income" means qualified production
17activities income as defined in
26 USC 199 (c).
SB123,2,2118
(b)
Filing claims. Subject to the limitations provided in this subsection, a
19claimant may claim as a credit against the tax imposed under s. 71.02, up to the
20amount of the tax, an amount equal to the claimant's eligible qualified production
21activities income in the taxable year, multiplied by 7.5 percent.
SB123,3,8
1(c)
Limitations. Partnerships, limited liability companies, and tax-option
2corporations may not claim the credit under this subsection, but the eligibility for,
3and the amount of, the credit are based on their share of the income described under
4par. (b). A partnership, limited liability company, or tax-option corporation shall
5compute the amount of credit that each of its partners, members, or shareholders
6may claim and shall provide that information to each of them. Partners, members
7of limited liability companies, and shareholders of tax-option corporations may
8claim the credit in proportion to their ownership interests.
SB123,3,109
(d)
Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
10s. 71.28 (4), applies to the credit under this subsection.
SB123, s. 3
11Section
3. 71.10 (4) (cr) of the statutes is created to read:
SB123,3,1212
71.10
(4) (cr) Qualified production activities credit under s. 71.07 (5n).
SB123, s. 4
13Section
4. 71.21 (4) of the statutes is amended to read:
SB123,3,1714
71.21
(4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
15(2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s),
16(3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k),
(5n), (5r), (5rm), and (8r) and passed
17through to partners shall be added to the partnership's income.
SB123,4,220
71.26
(2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd),
21(1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r),
22(3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k),
(5n), (5r), (5rm), (8r), and
23(9s) and not passed through by a partnership, limited liability company, or
24tax-option corporation that has added that amount to the partnership's, limited
1liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k)
2(g).
SB123, s. 6
3Section
6. 71.28 (5n) of the statutes is created to read:
SB123,4,54
71.28
(5n) Qualified production activities credit. (a)
Definitions. In this
5subsection:
SB123,4,66
1. "Claimant" means a person who files a claim under this subsection.
SB123,4,87
2. "Eligible qualified production activities income" means the lesser of the
8following:
SB123,4,119
a. Qualified production activities income that derives from property assessed
10as manufacturing property under s. 70.995 or property assessed as agricultural
11property under s. 70.32 (2) (a) 4.
SB123,4,1212
b. Income that is apportioned to this state under s. 71.25 (5), (6), and (6m).
SB123,4,1313
c. Income that is determined to be taxable in this state under s. 71.255 (2).
SB123,4,1514
3. "Qualified production activities income" means qualified production
15activities income as defined in
26 USC 199 (c).
SB123,4,1916
(b)
Filing claims. Subject to the limitations provided in this subsection, a
17claimant may claim as a credit against the tax imposed under s. 71.23, up to the
18amount of the tax, an amount equal to the claimant's eligible qualified production
19activities income in the taxable year, multiplied by 7.5 percent.
SB123,5,220
(c)
Limitations. Partnerships, limited liability companies, and tax-option
21corporations may not claim the credit under this subsection, but the eligibility for,
22and the amount of, the credit are based on their share of the income described under
23par. (b). A partnership, limited liability company, or tax-option corporation shall
24compute the amount of credit that each of its partners, members, or shareholders
25may claim and shall provide that information to each of them. Partners, members
1of limited liability companies, and shareholders of tax-option corporations may
2claim the credit in proportion to their ownership interests.
SB123,5,43
(d)
Administration. Subsection (4) (e) to (h), as it applies to the credit under
4sub. (4), applies to the credit under this subsection.
SB123, s. 7
5Section
7. 71.30 (3) (dn) of the statutes is created to read:
SB123,5,66
71.30
(3) (dn) Qualified production activities credit under s. 71.28 (5n).
SB123, s. 8
7Section
8. 71.34 (1k) (g) of the statutes is amended to read:
SB123,5,118
71.34
(1k) (g) An addition shall be made for credits computed by a tax-option
9corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy),
10(3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j),
11(5k),
(5n), (5r), (5rm), and (8r) and passed through to shareholders.
SB123,5,2014
71.45
(2) (a) 10. By adding to federal taxable income the amount of credit
15computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn),
16(3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k),
(5n), (5r), (5rm), (8r), and (9s) and not passed
17through by a partnership, limited liability company, or tax-option corporation that
18has added that amount to the partnership's, limited liability company's, or
19tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g) and the amount
20of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).
SB123, s. 10
21Section
10. 71.47 (5n) of the statutes is created to read:
SB123,5,2322
71.47
(5n) Qualified production activities credit. (a)
Definitions. In this
23subsection:
SB123,5,2424
1. "Claimant" means a person who files a claim under this subsection.
SB123,6,2
12. "Eligible qualified production activities income" means the lesser of the
2following:
SB123,6,53
a. Qualified production activities income that derives from property assessed
4as manufacturing property under s. 70.995 or property assessed as agricultural
5property under s. 70.32 (2) (a) 4.
SB123,6,66
b. Income that is apportioned to this state under s. 71.45 (3), (3d), and (3e).
SB123,6,77
c. Income that is determined to be taxable in this state under s. 71.255 (2).
SB123,6,98
3. "Qualified production activities income" means qualified production
9activities income as defined in
26 USC 199 (c).