(c) Allocating the electronic medical records tax credit to health care providers certified under this section.
(2) Definitions. In this section:
(a) “Claimant" has the meaning given in ss. 71.07 (5i) (a), 71.28 (5i) (a), and 71.47 (5i) (a), Stats.
(b) “Electronic medical record" means an electronic record of health-related information that includes patient demographic and clinical health information and has the capacity to provide clinical decision support; to support physician order entry; to capture and query information relevant to health care quality; and to exchange and integrate electronic health information with and from other sources.
(c) “Health care provider" has the meaning given in s. 146.81 (1) (a) to (p), Stats.
(d) “Taxable year" has the meaning given in ss. 71.01 (12), 71.22 (10), and 71.42 (5), Stats.
(3) Applying for certification and allocation. (a) The department shall provide an official form to apply for certification and allocation of the electronic medical records credit under ss. 71.07 (5i), 71.28 (5i), and 71.47 (5i), Stats. The form shall require an applicant to provide the following information:
1. The type of health care provider license or certification held and the license or certification number.
2. The amount paid in the taxable year for information technology hardware and software used to maintain electronic medical records.
3. A description of the information technology hardware and software, including the federal certification number issued pursuant to 45 CFR 170.
4. An explanation of how the information technology hardware and software is used to maintain electronic medical records.
5. Any other information, as determined by the department, necessary to certify a health care provider or allocate the credit under sub. (4).
(b) Each application shall be completed and submitted to the department, no sooner than upon completion of the calendar year in which the amount under par. (a) 2. was paid, and no later than January 31 of the subsequent calendar year.
Note: An application for the electronic medical records credit may be filed beginning January 1, 2013. The application form will be available on the department's web site at www.revenue.wi.gov by December 2012.
(4) Certification of applicants and allocation of credits. (a) Based on the information provided in sub. (3) (a) 1. to 5., the department shall certify health care providers as eligible for the electronic medical records credit under s. 71.07 (5i), 71.28 (5i), or 71.47 (5i), Stats.
(b) In conjunction with issuing a certification for an applicant, the department shall determine the amount of credit that the applicant may claim or distribute to its partners, members, or shareholders as follows:
1. If 50 percent of the total of the amounts under sub. (3) (a) 2. for all certified applicants does not exceed the $10,000,000 maximum total established in s. 73.15 (2), Stats., for allocations in each calendar year, the credit shall be equal to 50 percent of the amount the applicant paid during the calendar year for health information technology software certified pursuant to 45 CFR 170 and hardware used to run and access certified software.
2. If 50 percent of the total of the amounts under sub. (3) (a) 2. for all certified applicants exceeds the $10,000,000 maximum total established in s. 73.15 (2), Stats., for allocations in each calendar year, the $10,000,000 of credits shall be allocated to each certified applicant in proportion to the amount paid during the calendar year for health information technology software certified pursuant to 45 CFR 170 and hardware used to run and access certified software.
Example: Health Care Providers A, B, and C are certified to claim the electronic medical records credit for the following amounts paid in 2012 for certified software and related hardware:
A   $8,000,000
B   $12,000,000
C   $4,000,000
The $10,000,000 of credits available for 2012 are allocated to A, B, and C, based on their proportionate share of the $24,000,000. A is allocated a credit of $3,333,333 (= [8,000,000 ÷ 24,000,000] x $10,000,000), B is allocated a credit of $5,000,000 (= [12,000,000 ÷ 24,000,000] x $10,000,000), and C is allocated a credit of $1,666,667 (= [4,000,000 ÷ 24,000,000] x $10,000,000).
(c) Following completion of the certifications and allocations under pars. (a) and (b), the department shall notify each applicant of the outcome of their application, including the amount of credit allocated to the applicant.
Type of Estimate and Analysis
X Original Updated Corrected
Administrative Rule Chapter, Title and Number
Section Tax 2.985 - Electronic medical records credit
Electronic medical records credit under ss. 71.07(5i), 71.28(5i), and 71.47(5i), Stats.
Fund Sources Affected
Chapter 20 , Stats. Appropriations Affected
Fiscal Effect of Implementing the Rule
X No Fiscal Effect
Increase Existing Revenues
Decrease Existing Revenues
Increase Costs
Could Absorb Within Agency's Budget
Decrease Costs
The Rule Will Impact the Following (Check All That Apply)
State's Economy
Local Government Units
Specific Businesses/Sectors
Public Utility Rate Payers
Would Implementation and Compliance Costs Be Greater Than $20 million?
Yes X No
Policy Problem Addressed by the Rule
The rule does not create or revise policy, other than to reflect a statutory change.
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
The rule does not create any further impact or implementation and compliance costs beyond the statutes it interprets, except that, by providing clarifications and examples, may reduce the costs that businesses and individuals would otherwise incur to comply with the statutes.
No comments concerning the economic effect of the rule were submitted in response to the department's solicitation.
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
Clarifications and guidance provided by administrative rules may lower the compliance costs for businesses, local governmental units, and individuals.
If the rule is not implemented, Chapter Tax 2 will be incomplete in that it will not reflect current law.
Long Range Implications of Implementing the Rule
No long-range implications are anticipated.
Compare With Approaches Being Used by Federal Government
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
Assumptions used in arriving at fiscal estimate
The proposed rule order implements the electronic medical records credit under ss. 71.07 (5i). 71.28 (5i), 71.47 (5i), and 73.15 (1) and (2), Wis. Stats., as created in 2007 Act 20 and amended in 2011 Act 32.
Any fiscal effect resulting from the credit was included in previously issued fiscal estimates for 2007 Act 20 and 2011 Act 32. The proposed rule merely implements the credit, and as such the rule itself has no fiscal effect.
Notice of Hearing
NOTICE IS HEREBY GIVEN that, pursuant to sections 125.03 (1) and 125.28 (5) (e), Stats., the Department of Revenue will hold a public hearing to consider emergency and proposed permanent rules revising section Tax 7.23, relating to the activities of brewers, bottlers, out-of-state shippers, and wholesalers.
Hearing Information
The hearing will be held:
Date:   Monday, February 27, 2012
Time:   2:00 P.M.
Location:   State Revenue Building
  Events Room
  2135 Rimrock Road
  Madison, WI 53713
Handicap access is available at the hearing location.
Appearances at the Hearing and Submittal of Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person listed below no later than February 27, 2012, and will be given the same consideration as testimony presented at the hearing.
Dale Kleven
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
Telephone: (608) 266-8253
Analysis Prepared by the Department of Revenue
Statutes interpreted
Sections 125.02 (2), 125.28 (5) (e), and 139.01 (2), Stats.
Statutory authority
Sections 125.03 (1) and 125.28 (5) (e), Stats.
Explanation of agency authority
Section 125.03 (1), Stats., provides “[t]he department, in furtherance of effective control, may promulgate rules consistent with this chapter and Ch. 139."
Section 125.28 (5) (e), Stats., as created by 2011 Wisconsin Act 32, provides “[t]he department shall promulgate rules to administer and enforce the requirements under this subsection. The rules shall ensure coordination between the department's issuance and renewal of permits under this section and its enforcement of the requirements of this subsection, and shall require that all applications for issuance or renewal of permits under this section be processed by department personnel generally familiar with activities of fermented malt beverages wholesalers. The department shall establish by rule minimum requirements for warehouse facilities on premises described in permits issued under this section and for periodic site inspections by the department of such warehouse facilities."
Related statute or rule
Section 125.54, Stats., authorizes the department of Revenue to issue wholesalers' permits for the sale of intoxicating liquor to retailers, wholesalers and manufacturers, Chapters Tax 8.61 and 8.63, Wis. Adm. Code, provide the requirements for processing intoxicating liquor wholesalers' permits by the department and the minimum requirements for intoxicating liquor warehouse facilities.
Plain language analysis
This proposed rule does the following:
  Establishes the requirements for issuance and renewal of fermented malt beverage wholesalers' permits
  Describes the minimum requirements for fermented malt beverage wholesaler warehouse facilities.
  Details the process for applying for wholesalers' permits.
  Provides guidance regarding eligibility for out-of-state shippers' permits.
  Details the requirements for obtaining a brewer's permit and clarifies the permits required in contract brewing arrangements.
Summary of, and comparison with, existing or proposed federal regulation
Federal law, 27 U.S.C. Chapter 8, the Federal Alcohol Administration Act (FAAA) provides for the regulation of persons engaged in the alcohol beverage industry, and for the protection of consumers. The FAAA includes provisions to require a permit for those who engage in the business as a producer, importer, or wholesaler of alcohol beverages, and to ensure that labeling and advertising of alcohol beverages provides adequate information to consumers. Sections 7805 and 5051 of the Internal Revenue Code of 1986 authorize the Secretary of the Treasury to administer requirements for qualifying a brewery, operating a brewery, and for paying tax and labeling beer removed from a brewery. These duties are the responsibility of the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury (TTB). Regulations in 27 CFR part 25 implement the IRC beer provisions and include requirements on brewers that cover the production, removal, and tax payment of beer. TTB has issued Industry Circular Number 2005-2 providing guidance to brewers who wish to obtain TTB approval of a contract brewing arrangement. According to the Industry Circular, “a `contract brewing arrangement' is a business relationship in which one person, such as a wholesale or retail dealer or a brewer, pays a brewing company, the `contract brewer' to produce beer for him or her. The contract brewer is entirely responsible for producing the beer, keeping appropriate brewery records, labeling the beer with its name and address, obtaining necessary certificates of label approval (COLAs), and paying tax at the appropriate rate upon removal of the beer from the brewery. TTB considers contract brewing arrangements to be ordinary commercial arrangements." In a contract brewing arrangement, only one person, the contract brewer, must qualify as a brewer under 27 CFR part 25. The beer may be sold back to the person on whose behalf the beer was produced under contract, or to wholesalers, retailers, or to the ultimate consumer. If the person on whose behalf the beer is produced under contract resells the beer to a dealer, that person must hold a federal basic permit from TTB as a wholesaler under the FAAA.
Comparison with rules in adjacent states
The Iowa Alcoholic Beverages Division of the Iowa Department of Commerce issues permits for the manufacture and sale of alcoholic beverages, including fermented malt beverages, as authorized by the Iowa Administrative Code Chapter 185.
The Illinois Liquor Control Commission issues brewer's licenses to any person who is engaged in the manufacture of beer, as authorized by Illinois Compiled Statutes (235ILCS5/) the Illinois Liquor Control Act and rules in Illinois Administrative Code, Title 11, Subtitle A, Part 100.
The Michigan Liquor Control Commission issues beer manufacturer licenses to: brewers authorizing the licensee to manufacture and sell the beer they brew. (Michigan Complied Laws Sections 436.1105 through 436.1113, 436.1201, and 436.1203, and administrative code sections 436.1601 through 436.1659.)
The Minnesota Department of Public Safety Alcohol and Gambling Enforcement Division issues manufacturer's licenses to brewers, who may also be issued a wholesaler's license to sell the brewer's product at wholesale provided the brewer was selling their own products at wholesale in Minnesota on January 1, 1991. A licensed brewer may sell the brewer's products at wholesale only if the brewer has been issued a wholesaler's license. (2011 Minnesota statutes 340A.301, and Minnesota Administrative Rule Chapter 7515).
Summary of factual data and analytical methodologies
2011 Wisconsin Act 32 amended numerous sections in Chapter 125 Subchapter II affecting the three-tier system regulating the production, distribution and sale of fermented malt beverages (beer) in Wisconsin. The amendments converted the municipal beer wholesaler's license from a license issued by a local municipality to a statewide permit issued by the Department of Revenue. Act 32 also changed the requirements for obtaining a beer wholesaler's permit and for obtaining an out-of-state shipper's permit, and restructured the brewer's permit.
In consultation with manufacturers, wholesalers and retailers of fermented malt beverages, the department has created this proposed rule order to satisfy the above requirements. No other data was used in the preparation of this proposed rule order or this analysis.
Analysis and supporting documents used to determine effect on small business
This proposed rule is created in accordance with 2011 Wisconsin Act 32 to administer and enforce statutory requirements relating to the production, distribution and sale of fermented malt beverages, consistent with the legislature's support for the three-tier system and with the Federal Alcohol Administration Act as implemented by the Alcohol and Tobacco Tax and Trade Bureau (TTB). As explained above, the proposed rule is created to reflect changes to Wisconsin law regulating fermented malt beverages. As the rule itself does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.
Anticipated costs incurred by private sector
This proposed rule does not have a significant fiscal effect on the private sector.
Effect on Small Business
This proposed rule does not have a significant effect on small business.
Initial Regulatory Flexibility Analysis
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Agency Contact Person
Please contact Dale Kleven at (608) 266-8253 or dale.kleven@revenue.wi.gov, if you have any questions regarding this proposed rule.
Text of Rule
SECTION 1. Tax 7.23 (title) and (1) are amended to read:
Tax 7.23 (title) Activities of brewers, bottlers, out-of-state shippers, and wholesalers.
(1) In this rule section and in ss. 125.02, 125.04, 125.06, 125.07, 125.09, 125.26, 125.28, 125.29, 125.295, 125.30, 125.33, 125.34, and 139.01, Stats.:
SECTION 2. Tax 7.23 (1) (a) to (d) are renumbered 7.23 (1) (b) and (g) to (i)
Links to Admin. Code and Statutes in this Register are to current versions, which may not be the version that was referred to in the original published document.