SB859: Bill Text

LRB-5491/1

MPG&JK:amn&klm

2017 - 2018 LEGISLATURE

2017 Senate BILL 859

February 28, 2018 - Introduced by Senator Roth, cosponsored by Representatives Steineke, Rohrkaste, Murphy, Tusler, Spiros and Petersen. Referred to Committee on Economic Development, Commerce and Local Government.

SB859,1,6 An Act to amend 71.05 (6) (a) 15., 71.08 (1) (intro.), 71.10 (4) (i), 71.21 (4) (a), 71.26 (2) (a) 4., 71.30 (3) (f), 71.34 (1k) (g) and 238.12 (1); and to create 20.835 (2) (cq), 71.07 (3ym), 71.28 (3ym), 77.54 (67) and 238.165 of the statutes; relating to: authorizing certain tax benefits for a paper products manufacturer with facilities in the city of Neenah and village of Fox Crossing and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill authorizes the Wisconsin Economic Development Corporation to certify a certain paper products manufacturer to claim tax credits. The business certified by WEDC under the bill may claim as income and franchise tax credits a percentage of the business's eligible payroll for full-time employees, as defined in the bill, employed at the business's facilities in the city of Neenah and village of Fox Crossing, if the employment positions exist when the bill becomes law.

The bill further authorizes WEDC to certify the paper products manufacturer for additional income and franchise tax credits, subject to certain limitations, if the business makes a significant capital expenditure at a facility specified above. The bill also creates a sales and use tax exemption for the sale of building materials, supplies, and equipment used to construct or develop facilities located at a facility specified above if the capital expenditures for constructing or developing the facilities may be claimed as income and franchise tax credits by the business certified under the bill.

If the amount of any income and franchise tax credit under the bill exceeds the business's tax liability, the business receives a refund equal to the excess amount.

WEDC may seek repayment of tax credits that the business claims for a year in which the business failed to maintain employment levels or a significant capital investment in property required by contract between the business and WEDC. Also, WEDC must revoke the certification to claim tax credits if the business does any of the following:

1. Supplies false or misleading information to obtain the tax credits.

2. Leaves the state to conduct substantially the same business outside the state.

3. Ceases operations in the state and does not renew operation of the business or a similar business in the state within 12 months.

4. Fails to retain at least 93 percent of its full-time employees at the facilities specified above who were identified as being full-time employees of the business in the base year, as determined by WEDC.

5. Fails to retain at least 93 percent of its full-time employees employed in this state but outside the facilities specified above who were identified as being full-time employees of the business in the base year, as determined by WEDC.

A certification under the bill may remain in effect for no more than 15 years.

Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill.

For further information see the state and local 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:

SB859,1 Section 1. 20.835 (2) (cq) of the statutes is created to read:

SB859,2,3 20.835 (2) (cq) Paper products manufacturer credit. A sum sufficient to make the payments under ss. 71.07 (3ym) (d) 2. and 71.28 (3ym) (d) 2.

SB859,2 Section 2. 71.05 (6) (a) 15. of the statutes, as affected by 2017 Wisconsin Act 58, is amended to read:

SB859,3,2 71.05 (6) (a) 15. Except as provided under s. 71.07 (3p) (c) 5., the amount of the credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (3wm), (3y), (3ym), (4k), (4n), (5e), (5f), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), 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).

SB859,3 Section 3. 71.07 (3ym) of the statutes is created to read:

SB859,3,5 71.07 (3ym) Paper products manufacturer credit. (a) Definitions. In this subsection:

SB859,3,7 1. “Claimant" means a person who is certified to claim tax benefits under s. 238.165 (2) and who files a claim under this subsection.

SB859,3,10 2. “Eligible payroll" means the amount of state payroll that is attributable to wages paid by the claimant to full-time employees. “Eligible payroll" does not include the amount of wages paid to any full-time employee that exceeds $100,000.

SB859,3,11 3. “Full-time employee" has the meaning given in s. 238.165 (1m) (a).

SB859,3,13 4. “State payroll" means the amount of payroll apportioned to this state, as determined under s. 71.25 (8).

SB859,3,15 5. “Wages" means wages under section 3306 (b) of the Internal Revenue Code, determined without regard to any dollar limitations.

SB859,3,18 (b) Filing claims; payroll. Subject to the limitations provided in this subsection and s. 238.165, a claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08 an amount calculated as follows:

SB859,3,20 1. Determine the eligible payroll for the taxable year for full-time employees employed by the claimant.

SB859,3,21 2. Multiply the amount determined under subd. 1. by 17 percent.

SB859,4,2 (bm) Filing supplemental claims. In addition to claiming the credit under par. (b), and subject to the limitations under this subsection and s. 238.165, a claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08 an amount up to 15 percent of the claimant's significant capital expenditures in this state in the taxable year, as determined under s. 238.165 (4).

SB859,4,10 (c) Limitations. 1. 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 amounts described under pars. (b) and (bm). 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.

SB859,4,13 2. No credit may be allowed under this subsection unless the claimant includes with the claimant's return a copy of the claimant's certification for tax benefits under s. 238.165 (2).

SB859,4,15 (d) Administration. 1. Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB859,4,21 2. If the allowable amount of the claim under this subsection exceeds the taxes otherwise due on the claimant's income under s. 71.02, the amount of the claim that is not used to offset those taxes shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft drawn from the appropriation under s. 20.835 (2) (cq). Notwithstanding s. 71.82, no interest shall be paid on amounts certified under this subdivision.

SB859,4 Section 4. 71.08 (1) (intro.) of the statutes, as affected by 2017 Wisconsin Act 58, is amended to read:

SB859,5,8 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust, or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dx), (2dy), (3m), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (3wm), (3y), (3ym), (4k), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (5n), (6), (6e), (8r), (9e), (9m), and (9r), 71.28 (1dx), (1dy), (2m), (3), (3n), (3t), (3w), (3wm), and (3y), and (3ym), 71.47 (1dx), (1dy), (2m), (3), (3n), (3t), (3w), and (3y), 71.57 to 71.61, and 71.613 and subch. VIII and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:

SB859,5 Section 5. 71.10 (4) (i) of the statutes, as affected by 2017 Wisconsin Acts 58 and 59, is amended to read:

SB859,6,2 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and beyond under s. 71.613, homestead credit under subch. VIII, farmland tax relief credit under s. 71.07 (3m), dairy manufacturing facility investment credit under s. 71.07 (3p), jobs tax credit under s. 71.07 (3q), meat processing facility investment credit under s. 71.07 (3r), woody biomass harvesting and processing credit under s. 71.07 (3rm), food processing plant and food warehouse investment credit under s. 71.07 (3rn), business development credit under s. 71.07 (3y), research credit under s. 71.07 (4k) (e) 2. a., film production services credit under s. 71.07 (5f), film production company investment credit under s. 71.07 (5h), veterans and surviving spouses property tax credit under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), electronics and information technology manufacturing zone credit under s. 71.07 (3wm), paper products manufacturer credit under s. 71.07 (3ym), beginning farmer and farm asset owner tax credit under s. 71.07 (8r), earned income tax credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld under subch. X.

SB859,6 Section 6. 71.21 (4) (a) of the statutes, as affected by 2017 Wisconsin Act 58, is amended to read:

SB859,6,8 71.21 (4) (a) The amount of the credits computed by a partnership under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (3wm), (3y), (3ym), (4k), (4n), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), and (8r) and passed through to partners shall be added to the partnership's income.

SB859,7 Section 7. 71.26 (2) (a) 4. of the statutes, as affected by 2017 Wisconsin Acts 58 and 59, is amended to read:

SB859,6,16 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (3wm), (3y), (3ym), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), (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).

SB859,8 Section 8. 71.28 (3ym) of the statutes is created to read:

SB859,6,19 71.28 (3ym) Paper products manufacturer credit. (a) Definitions. In this subsection: