SB448: Bill Text

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2011 - 2012 LEGISLATURE

2011 Senate BILL 448

February 9, 2012 - Introduced by Senator Grothman, cosponsored by Representatives Jacque, Kerkman, Fields, Bies, Brooks, Mursau, Spanbauer, Stroebel, Pridemore and Toles. Referred to Committee on Economic Development and Veterans and Military Affairs.

SB448,1,4 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a) 4., 71.34 (1k) (g), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (5p), 71.10 (4) (cs), 71.28 (5p), 71.30 (3) (dr), 71.47 (5p) and 71.49 (1) (dr) of the statutes; relating to: an income tax and franchise tax credit for training apprentices.

Analysis by the Legislative Reference Bureau

This bill creates an income tax and franchise tax credit for an employer that pays wages to an apprentice who is participating in a two-year to five-year apprenticeship program in which the apprentice is receiving instruction leading to qualification as a skilled journeyman in any of the five industrial manufacturing trades; any of the five private sector service occupations; or any of the five construction trades; with the most projected job openings for new entrants, as determined by the Department of Workforce Development. The amount of the credit is 5 percent of the wages paid to an apprentice in a taxable year, but cannot exceed $1,400, except that, in the taxable year in which the apprentice completes the apprenticeship program, the amount of the credit is 8 percent of the wages paid to an apprentice, but cannot exceed $3,000. Generally, no employer may claim the credit for taxable years beginning after December 31, 2014, if the number of employers training apprentices does not increase by more than 40 percent from January 1, 2012, to December 31, 2014.

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:

SB448, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

SB448,2,8 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k), (5n), (5p), (5r), (5rm), and (8r) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).

SB448, s. 2 Section 2. 71.07 (5p) of the statutes is created to read:

SB448,2,11 71.07 (5p) Industrial, service, and skilled trades apprenticeship credit. (a) Definitions. In this subsection:

SB448,2,20 1. "Apprentice" means a person who participates in a 2-year to 5-year apprenticeship program, as determined and approved by the department of workforce development, in which the person receives instruction leading to qualification as a skilled journeyman in an industrial manufacturing trade, construction trade, or private sector service occupation, if the apprenticeship program provides instruction related to any of the 5 manufacturing trades; any of the 5 construction trades; or any of the 5 private sector service occupations; with the most projected job openings for new entrants, as determined by the department of workforce development.

SB448,3,3 2. "Claimant" means a person who files a claim under this subsection and who is a trades trainer, as determined and approved by the department of workforce development.

SB448,3,12 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2011, a claimant may claim as a credit against the taxes imposed under s. 71.02 an amount equal to 5 percent of the wages the claimant paid to an apprentice in the taxable year, but the amount of the credit may not exceed $1,400 for each apprentice, except that a claimant may claim as a credit against the taxes imposed under s. 71.02 an amount equal to 8 percent of the wages the claimant paid to an apprentice in the taxable year in which the apprentice completes an apprenticeship program, but the amount of the credit may not exceed $3,000 for each apprentice.

SB448,3,15 (c) Limitations. 1. With respect to an apprentice who is employed in a full-time job as an apprentice, no person may claim a credit under this subsection and sub. (2dx) or (2dy) for the same job.

SB448,4,2 2. This subsection does not apply to taxable years that begin after December 31, 2014, if the number of employers training apprentices in programs approved by the department of workforce development does not increase by more than 40 percent from January 1, 2012, to December 31, 2014, as determined by the department of workforce development, except that a claimant who has claimed a credit for an apprentice's wages in any taxable year beginning before January 1, 2015, may continue to claim a credit for the apprentice's wages in succeeding taxable years, until the apprentice completes the apprenticeship program. As soon as practicable after December 31, 2014, the department of workforce development shall certify to the department of revenue the number of employers training apprentices in approved programs on January 1, 2012, and the number of employers training apprentices in approved programs on December 31, 2014.

SB448,4,10 3. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of wages under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

SB448,4,12 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB448, s. 3 Section 3. 71.10 (4) (cs) of the statutes is created to read:

SB448,4,15 71.10 (4) (cs) Industrial, service, and skilled trades apprenticeship credit under s. 71.07 (5p).

SB448, s. 4 Section 4. 71.21 (4) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

SB448,4,21 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5p), (5r), (5rm), and (8r) and passed through to partners shall be added to the partnership's income.

SB448, s. 5 Section 5. 71.26 (2) (a) 4. of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

SB448,5,5 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5p), (5r), (5rm), (8r), and (9s) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).

SB448, s. 6 Section 6. 71.28 (5p) of the statutes is created to read:

SB448,5,8 71.28 (5p) Industrial, service, and skilled trades apprenticeship credit. (a) Definitions. In this subsection:

SB448,5,17 1. "Apprentice" means a person who participates in a 2-year to 5-year apprenticeship program, as determined and approved by the department of workforce development, in which the person receives instruction leading to qualification as a skilled journeyman in an industrial manufacturing trade, construction trade, or private sector service occupation, if the apprenticeship program provides instruction related to any of the 5 manufacturing trades; any of the 5 construction trades; or any of the 5 private sector service occupations; with the most projected job openings for new entrants, as determined by the department of workforce development.

SB448,5,20 2. "Claimant" means a person who files a claim under this subsection and who is a trades trainer, as determined and approved by the department of workforce development.

SB448,6,4 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2011, a claimant may claim as a credit against the taxes imposed under s. 71.23 an amount equal to 5 percent of the wages the claimant paid to an apprentice in the taxable year, but the amount of the credit may not exceed $1,400 for each apprentice, except that a claimant may claim as a credit against the taxes imposed under s. 71.23 an amount equal to 8 percent of the wages the claimant paid to an apprentice in the taxable year in which the apprentice completes an apprenticeship program, but the amount of the credit may not exceed $3,000 for each apprentice.

SB448,6,7 (c) Limitations. 1. With respect to an apprentice who is employed in a full-time job as an apprentice, no person may claim a credit under this subsection and sub. (1dx) or (1dy) for the same job.

SB448,6,19 2. This subsection does not apply to taxable years that begin after December 31, 2014, if the number of employers training apprentices in programs approved by the department of workforce development does not increase by more than 40 percent from January 1, 2012, to December 31, 2014, as determined by the department of workforce development, except that a claimant who has claimed a credit for an apprentice's wages in any taxable year beginning before January 1, 2015, may continue to claim a credit for the apprentice's wages in succeeding taxable years, until the apprentice completes the apprenticeship program. As soon as practicable after December 31, 2014, the department of workforce development shall certify to the department of revenue the number of employers training apprentices in approved programs on January 1, 2012, and the number of employers training apprentices in approved programs on December 31, 2014.

SB448,7,2 3. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of wages under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

SB448,7,4 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB448, s. 7 Section 7. 71.30 (3) (dr) of the statutes is created to read:

SB448,7,7 71.30 (3) (dr) The industrial, service, and skilled trades apprenticeship credit under s. 71.28 (5p).

SB448, s. 8 Section 8. 71.34 (1k) (g) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

SB448,7,13 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5p), (5r), (5rm), and (8r) and passed through to shareholders.

SB448, s. 9 Section 9. 71.45 (2) (a) 10. of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

SB448,7,22 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5p), (5r), (5rm), (8r), and (9s) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).

SB448, s. 10 Section 10. 71.47 (5p) of the statutes is created to read:

SB448,7,25 71.47 (5p) Industrial, service, and skilled trades apprenticeship credit. (a) Definitions. In this subsection:

SB448,8,9 1. "Apprentice" means a person who participates in a 2-year to 5-year apprenticeship program, as determined and approved by the department of workforce development, in which the person receives instruction leading to qualification as a skilled journeyman in an industrial manufacturing trade, construction trade, or private sector service occupation, if the apprenticeship program provides instruction related to any of the 5 manufacturing trades; any of the 5 construction trades; or any of the 5 private sector service occupations; with the most projected job openings for new entrants, as determined by the department of workforce development.

SB448,8,12 2. "Claimant" means a person who files a claim under this subsection and who is a trades trainer, as determined and approved by the department of workforce development.

SB448,8,21 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2011, a claimant may claim as a credit against the taxes imposed under s. 71.43 an amount equal to 5 percent of the wages the claimant paid to an apprentice in the taxable year, but the amount of the credit may not exceed $1,400 for each apprentice, except that a claimant may claim as a credit against the taxes imposed under s. 71.43 an amount equal to 8 percent of the wages the claimant paid to an apprentice in the taxable year in which the apprentice completes an apprenticeship program, but the amount of the credit may not exceed $3,000 for each apprentice.

SB448,8,24 (c) Limitations. 1. With respect to an apprentice who is employed in a full-time job as an apprentice, no person may claim a credit under this subsection and sub. (1dx) or (1dy) for the same job.

SB448,9,12 2. This subsection does not apply to taxable years that begin after December 31, 2014, if the number of employers training apprentices in programs approved by the department of workforce development does not increase by more than 40 percent from January 1, 2012, to December 31, 2014, as determined by the department of workforce development, except that a claimant who has claimed a credit for an apprentice's wages in any taxable year beginning before January 1, 2015, may continue to claim a credit for the apprentice's wages in succeeding taxable years, until the apprentice completes the apprenticeship program. As soon as practicable after December 31, 2014, the department of workforce development shall certify to the department of revenue the number of employers training apprentices in approved programs on January 1, 2012, and the number of employers training apprentices in approved programs on December 31, 2014.

SB448,9,20 3. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of wages under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

SB448,9,22 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB448, s. 11 Section 11. 71.49 (1) (dr) of the statutes is created to read:

SB448,9,25 71.49 (1) (dr) Industrial, service, and skilled trades apprenticeship credit under s. 71.47 (5p).

SB448, s. 12 Section 12. 77.92 (4) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

SB448,10,18 77.92 (4) "Net business income," with respect to a partnership, means taxable income as calculated under section 703 of the Internal Revenue Code; plus the items of income and gain under section 702 of the Internal Revenue Code, including taxable state and municipal bond interest and excluding nontaxable interest income or dividend income from federal government obligations; minus the items of loss and deduction under section 702 of the Internal Revenue Code, except items that are not deductible under s. 71.21; plus guaranteed payments to partners under section 707 (c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5p), (5r), (5rm), and (8r); and plus or minus, as appropriate, transitional adjustments, depreciation differences, and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain, loss, and deductions from farming. "Net business income," with respect to a natural person, estate, or trust, means profit from a trade or business for federal income tax purposes and includes net income derived as an employee as defined in section 3121 (d) (3) of the Internal Revenue Code.

SB448,10,19 (End)