ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO ASSEMBLY BILL 172
May 23, 2023 - Offered by Representative Sortwell.
AB172-ASA1,1,4 1An Act to amend 71.05 (6) (a) 15. and 71.21 (4) (a); and to create 71.07 (11),
271.10 (4) (ga) and 238.165 of the statutes; relating to: a sole proprietor,
3single-member limited liability company, or single-owner corporation
4employee tax credit.
Analysis by the Legislative Reference Bureau
This bill creates a tax credit program administered by the Wisconsin Economic
Development Corporation under which a person, referred to in the bill as an “eligible
applicant,” who owns a sole proprietorship, single-member limited liability
company, or single-owner corporation in Wisconsin may receive tax credits in
connection with the employee the eligible applicant employs in the first full-time job
created by the applicant.
Specifically, under the bill, WEDC may certify an eligible applicant to claim a
nonrefundable credit to offset income taxes for up to three consecutive taxable years
as follows:
1. For the first such taxable year during which the eligible applicant employs
an employee in an eligible full-time job, an amount equal to 100 percent of the wages
paid to the employee in that year or $10,000, whichever is less.
2. For the second such taxable year during which the eligible applicant employs
an employee in an eligible full-time job, an amount equal to 50 percent of the wages
paid to that employee in that year or $5,000, whichever is less.

3. For the third such taxable year during which the eligible applicant employs
an employee in an eligible full-time job, an amount equal to 25 percent of the wages
paid to that employee in that year or $2,500, whichever is less.
A full-time job is eligible under the bill if it is the first full-time job created by
the eligible applicant that is not held by the eligible applicant or a member of the
eligible applicant's immediate family and if the job was first created by the eligible
applicant within the three years immediately preceding the date of initial
application. The bill defines “full-time job" to mean a regular, nonseasonal full-time
position 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, and for which the
individual receives pay that is equal to at least 150 percent of the federal minimum
wage. Under the bill, the maximum amount of the credits that WEDC may certify
under the program may not exceed $20,000,000 in any calendar year.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB172-ASA1,1 1Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:
AB172-ASA1,2,72 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm),
3(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5i), (5j),
4(5k), (5r), (5rm), (6n), and (10), and (11) and not passed through by a partnership,
5limited liability company, or tax-option corporation that has added that amount to
6the partnership's, company's, or tax-option corporation's income under s. 71.21 (4)
7or 71.34 (1k) (g).
AB172-ASA1,2 8Section 2. 71.07 (11) of the statutes is created to read:
AB172-ASA1,2,119 71.07 (11) Single-owner business employee tax credit. (a) Definition. In this
10subsection, “claimant” means a person certified to receive tax benefits under s.
11238.165.
AB172-ASA1,2,1412 (b) Filing Claims. For taxable years beginning after December 31, 2022, and
13subject to the limitations provided in this subsection and s. 238.165, a claimant may
14claim as a credit against the tax imposed under s. 71.02 an amount as follows:
AB172-ASA1,3,3
11. For the first taxable year for which the claimant is certified by the Wisconsin
2Economic Development Corporation under s. 238.165 (3), the amount certified under
3s. 238.165 (3) (a) 1.
AB172-ASA1,3,64 2. For the 2nd taxable year for which the claimant is certified by the Wisconsin
5Economic Development Corporation under s. 238.165 (3), the amount certified under
6s. 238.165 (3) (a) 2.
AB172-ASA1,3,97 3. For the 3rd taxable year for which the claimant is certified by the Wisconsin
8Economic Development Corporation under s. 238.165 (3), the amount certified under
9s. 238.165 (3) (a) 3.
AB172-ASA1,3,1210 (c) Limitations. 1. No credit may be allowed under this subsection unless the
11claimant includes with the claimant's return a copy of the claimant's certification for
12tax benefits under s. 238.165 (3).
AB172-ASA1,3,1413 2. No credit may be allowed under this subsection unless it is claimed within
14the time period under s. 71.75 (2).
AB172-ASA1,3,1615 (d) Administration. 1. Subsection (9e) (d), to the extent that it applies to the
16credit under that subsection, applies to the credit under this subsection.
AB172-ASA1,3,2217 2. If a credit computed under this subsection is not entirely offset against
18Wisconsin income taxes otherwise due, the unused balance may be carried forward
19and credited against Wisconsin income taxes otherwise due for the following 15
20taxable years to the extent not offset by these taxes otherwise due in all intervening
21years between the year in which the wages are paid and the year in which the
22carry-forward credit is claimed.
AB172-ASA1,3 23Section 3. 71.10 (4) (ga) of the statutes is created to read:
AB172-ASA1,3,2424 71.10 (4) (ga) Single-owner business employee tax credit under s. 71.07 (11).
AB172-ASA1,4 25Section 4. 71.21 (4) (a) of the statutes is amended to read:
AB172-ASA1,4,4
171.21 (4) (a) The amount of the credits computed by a partnership under s.
271.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
3(5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10), and (11), and passed through to
4partners shall be added to the partnership's income.
AB172-ASA1,5 5Section 5. 238.165 of the statutes is created to read:
AB172-ASA1,4,7 6238.165 Single-owner business employee tax credit. (1) Definitions. In
7this section:
AB172-ASA1,4,98 (a) “Eligible applicant” means a person that is eligible to receive tax benefits
9under this section.
AB172-ASA1,4,1410 (b) “Eligible full-time job” means the first full-time job created by the eligible
11applicant that is not held by the eligible applicant or a member of the eligible
12applicant's immediate family, if the job was first created within the 3 years
13immediately preceding the date of the eligible applicant's initial application for tax
14benefits under this section.
AB172-ASA1,4,1815 (c) “Full-time job" means a regular, nonseasonal full-time position in which an
16individual, as a condition of employment, is required to work at least 2,080 hours per
17year, including paid leave and holidays, and for which the individual receives pay
18that is equal to at least 150 percent of the federal minimum wage.
AB172-ASA1,4,2019 (d) “Immediate family" means persons who are related as spouses, as siblings,
20or as parent and child.
AB172-ASA1,4,2221 (e) “Tax benefits” means the single-owner business employee tax credit under
22under s. 71.07 (11).
AB172-ASA1,4,25 23(2) Certification eligibility. An applicant for tax benefits under this section
24is eligible for certification under sub. (3), subject to verification under the policies and
25procedures established under sub. (4), if all of the following apply:
AB172-ASA1,5,2
1(a) The applicant is the owner of a sole proprietorship, single-member limited
2liability company, or single-owner corporation in this state.
AB172-ASA1,5,43 (b) The applicant has not previously received tax benefits under this section for
4a different business.
AB172-ASA1,5,6 5(3) Certification. (a) The corporation shall certify an eligible applicant to
6claim tax benefits for up to 3 consecutive taxable years as follows:
AB172-ASA1,5,97 1. For the first such taxable year during which the eligible applicant employs
8an employee in an eligible full-time job, an amount equal to 100 percent of the wages
9paid to that employee in that year or $10,000, whichever is less.
AB172-ASA1,5,1210 2. For the 2nd such taxable year during which the eligible applicant employs
11an employee in an eligible full-time job, an amount equal to 50 percent of the wages
12paid to that employee in that year or $5,000, whichever is less.
AB172-ASA1,5,1513 3. For the 3rd such taxable year during which the eligible applicant employs
14an employee in an eligible full-time job, an amount equal to 25 percent of the wages
15paid to that employee in that year or $2,500, whichever is less.
AB172-ASA1,5,1816 (b) The corporation may not award certificates for tax benefits under this
17section totaling more than $20,000,000 in any calendar year and shall prorate the
18amounts certified as necessary based on the number of certificates awarded.
AB172-ASA1,5,21 19(4) Policies and procedures. The corporation shall establish policies and
20procedures to verify the accuracy of all information provided by an applicant for tax
21benefits under this section.
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