Wisconsin Legislature: 25,1286hm

25,1272 Section 1272. 71.01 (8g) of the statutes is amended to read:

71.01 (8g) "Member" does not include a member of a limited liability company treated as a corporation under s. 71.22 (1) (1k).

25,1273 Section 1273. 71.01 (8m) of the statutes is amended to read:

71.01 (8m) "Partner" does not include a partner of a publicly traded partnership treated as a corporation under s. 71.22 (1) (1k).

25,1274 Section 1274. 71.01 (10g) of the statutes is created to read:

71.01 (10g) For purposes of s. 71.04 (7) (df) and (dh), "state" means a state of the United States, the District of Columbia, the commonwealth of Puerto Rico, or any territory or possession of the United States, unless the context requires that "state" means only the state of Wisconsin.

25,1275 Section 1275. 71.03 (1) of the statutes is amended to read:

71.03 (1) Definition. In this section, "gross income" means all income, from whatever source derived and in whatever form realized, whether in money, property or services, which is not exempt from Wisconsin income taxes. "Gross income" includes, but is not limited to, the following items: compensation for services, including salaries, wages and fees, commissions and similar items; gross income derived from business; interest; rents; royalties; dividends; alimony and separate maintenance payments; annuities; income from life insurance and endowment contracts; pensions; income from discharge of indebtedness; distributive shares of partnership gross income except distributive shares of the income of publicly traded partnerships treated as corporations under s. 71.22 (1) (1k); distributive shares of limited liability company gross income except distributive shares of the income of limited liability companies treated as corporations under s. 71.22 (1) (1k); income in respect of a decedent; and income from an interest in an estate or trust. "Gross income" from a business or farm consists of the total gross receipts without reduction for cost of goods sold, expenses or any other amounts. The gross rental amounts received from rental properties are included in gross income without reduction for expenses or any other amounts. "Gross income" from the sale of securities, property or other assets consists of the gross selling price without reduction for the cost of the assets, expenses of sale or any other amounts. "Gross income" from an annuity, retirement plan or profit sharing plan consists of the gross amount received without reduction for the employee's contribution to the annuity or plan.

25,1276m Section 1276m. 71.04 (7) (d) of the statutes is amended to read:

71.04 (7) (d) Sales Except as provided in pars. (df) and (dh), sales, other than sales of tangible personal property, are in this state if the income-producing activity is performed in this state. If the income-producing activity is performed both in and outside this state the sales shall be divided between those states having jurisdiction to tax such business in proportion to the direct costs of performance incurred in each such state in rendering this service. Services performed in states which do not have jurisdiction to tax the business shall be deemed to have been performed in the state to which compensation is allocated by s. 71.04 (6), 2001 stats.

25,1279 Section 1279. 71.04 (7) (df) of the statutes is created to read:

71.04 (7) (df) 1. Gross receipts from the use of computer software are in this state if the purchaser or licensee uses the computer software at a location in this state.

2. Computer software is used at a location in this state if the purchaser or licensee uses the computer software in the regular course of business operations in this state, for personal use in this state, or if the purchaser or licensee is an individual whose domicile is in this state. If the purchaser or licensee uses the computer software in more than one state, the gross receipts shall be divided among those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the computer software in those states. To determine computer software use in this state, the department may consider the number of users in each state where the computer software is used, the number of site licenses or workstations in this state, and any other factors that reflect the use of computer software in this state.

3. If the taxpayer is not subject to income tax in the state in which the gross receipts are considered received under this paragraph, but the taxpayer's commercial domicile is in this state, 50 percent of those gross receipts shall be included in the numerator of the sales factor.

25,1281 Section 1281. 71.04 (7) (dh) of the statutes is created to read:

71.04 (7) (dh) 1. Gross receipts from services are in this state if the purchaser of the service received the benefit of the service in this state.

2. The benefit of a service is received in this state if any of the following applies:

a. The service relates to real property that is located in this state.

b. The service relates to tangible personal property that is located in this state at the time that the service is received or tangible personal property that is delivered directly or indirectly to customers in this state.

c. The service is provided to an individual who is physically present in this state at the time that the service is received.

d. The service is provided to a person engaged in a trade or business in this state and relates to that person's business in this state.

3. If the purchaser of a service receives the benefit of a service in more than one state, the gross receipts from the performance of the service are included in the numerator of the sales factor according to the portion of the service received in this state.

4. If the taxpayer is not subject to income tax in the state in which the benefit of the service is received, the benefit of the service is received in this state to the extent that the taxpayer's employees or representatives performed services from a location in this state. Fifty percent of the taxpayer's receipts that are considered received in this state under this paragraph shall be included in the numerator of the sales factor.

25,1286c Section 1286c. 71.05 (1) (bm) of the statutes is created to read:

71.05 (1) (bm) Health Insurance Risk-Sharing Plan. Income of the organization administering the Health Insurance Risk-Sharing Plan under ch. 149.

25,1286e Section 1286e. 71.05 (6) (b) 20. (intro.) of the statutes is amended to read:

71.05 (6) (b) 20. (intro.) For taxable years beginning on or after January 1, 1995, and before January 1, 2006, an amount paid by a person who is the employee of another person if the person's employer pays no amount of money toward the person's medical care insurance, for medical care insurance for the person, his or her spouse and the person's dependents, calculated as follows:

25,1286gm Section 1286gm. 71.05 (6) (b) 21. of the statutes is renumbered 71.05 (6) (b) 21. a. and amended to read:

71.05 (6) (b) 21. a. The For taxable years beginning before January 1, 2007, the difference between the amount of social security benefits included in federal adjusted gross income for the current year and the amount calculated under section 86 of the internal revenue code Internal Revenue Code as that section existed on December 31, 1992.

25,1286hm Section 1286hm. 71.05 (6) (b) 21. b. of the statutes is created to read:

71.05 (6) (b) 21. b. For taxable years beginning after December 31, 2006, and before January 1, 2008, the difference between the amount of social security benefits included in federal adjusted gross income for the current year and 70 percent of the amount calculated under section 86 of the Internal Revenue Code as that section existed on December 31, 1992.

25,1286im Section 1286im. 71.05 (6) (b) 21. c. of the statutes is created to read:

71.05 (6) (b) 21. c. For taxable years beginning after December 31, 2007 and before January 1, 2009, the difference between the amount of social security benefits included in federal adjusted gross income for the current year and 40 percent of the amount calculated under section 86 of the Internal Revenue Code as that section existed on December 31, 1992.

25,1286jm Section 1286jm. 71.05 (6) (b) 21. d. of the statutes is created to read:

71.05 (6) (b) 21. d. For taxable years beginning after December 31, 2008, the amount of social security benefits included in federal adjusted gross income under section 86 of the Internal Revenue Code.

25,1286Lm Section 1286Lm. 71.05 (6) (b) 22. of the statutes is amended to read:

71.05 (6) (b) 22. For taxable years beginning after December 31, 1995, and before January 1, 2006, an amount up to $5,000 that is expended during the period that consists of the year to which the claim relates and the prior 2 taxable years, by a full-year resident of this state who is an adoptive parent, for adoption fees, court costs or legal fees relating to the adoption of a child, for whom a final order of adoption has been entered under s. 48.91 (3) during the taxable year.

25,1287 Section 1287. 71.05 (6) (b) 28. (intro.) of the statutes is amended to read:

71.05 (6) (b) 28. (intro.) An amount paid by a claimant for tuition expenses for a student who is the claimant or who is the claimant's child and the claimant's dependent who is claimed under section 151 (c) of the Internal Revenue Code, to attend any university, college, technical college or a school approved under s. 45.54 38.50, that is located in Wisconsin or to attend a public vocational school or public institution of higher education in Minnesota under the Minnesota-Wisconsin reciprocity agreement under s. 39.47, calculated as follows:

25,1288 Section 1288. 71.05 (6) (b) 28. a. of the statutes is amended to read:

71.05 (6) (b) 28. a. An amount equal to not more than $3,000 twice the average amount charged by the board of regents of the University of Wisconsin System at 4-year institutions for resident undergraduate academic fees for the most recent fall semester, as determined by the board of regents by September 1 of that semester, per student for each year to which the claim relates.

25,1288e Section 1288e. 71.05 (6) (b) 35. of the statutes is created to read:

71.05 (6) (b) 35. For taxable years beginning after December 31, 2005, an amount paid by an individual who is the employee of another person if the individual's employer pays no amount of money toward the individual's medical care insurance, for medical care insurance for the individual, his or her spouse, and the individual's dependents, calculated as follows:

a. One hundred percent of the amount paid by the individual for medical care insurance. In this subdivision, "medical care insurance" means a medical care insurance policy that covers the individual, his or her spouse, and the individual's dependents and provides surgical, medical, hospital, major medical, or other health service coverage, and includes payments made for medical care benefits under a self-insured plan, but "medical care insurance" does not include hospital indemnity policies or policies with ancillary benefits such as accident benefits or benefits for loss of income resulting from a total or partial inability to work because of illness, sickness, or injury.

b. From the amount calculated under subd. 35. a., subtract the amounts deducted from gross income for medical care insurance in the calculation of federal adjusted gross income.

c. For an individual who is a nonresident or part-year resident of this state, multiply the amount calculated under subd. 35. a. or b., by a fraction the numerator of which is the individual's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state and the denominator of which is the individual's total wages, salary, tips, unearned income, and net earnings from a trade or business. In this subd. 35. c., for married persons filing separately "wages, salary, tips, unearned income, and net earnings from a trade or business" means the separate wages, salary, tips, unearned income, and net earnings from a trade or business of each spouse, and for married persons filing jointly "wages, salary, tips, unearned income, and net earnings from a trade or business" means the total wages, salary, tips, unearned income, and net earnings from a trade or business of both spouses.

d. Reduce the amount calculated under subd. 35. a., b., or c. to the individual's aggregate wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state.

25,1288f Section 1288f. 71.05 (6) (b) 36. of the statutes is created to read:

71.05 (6) (b) 36. For taxable years beginning after December 31, 2006, and before January 1, 2008, an amount paid by an individual, other than a person to whom subd. 19. applies, who has no employer and no self-employment income, for medical care insurance for the individual, his or her spouse, and the individual's dependents, calculated as follows:

a. Thirty-three and four-tenths percent of the amount paid by the individual for medical care insurance. In this subdivision, "medical care insurance" means a medical care insurance policy that covers the individual, his or her spouse, and the individual's dependents and provides surgical, medical, hospital, major medical, or other health service coverage, and includes payments made for medical care benefits under a self-insured plan, but "medical care insurance" does not include hospital indemnity policies or policies with ancillary benefits such as accident benefits or benefits for loss of income resulting from a total or partial inability to work because of illness, sickness, or injury.

b. From the amount calculated under subd. 36. a., subtract the amounts deducted from gross income for medical care insurance in the calculation of federal adjusted gross income.

c. For an individual who is a nonresident or part-year resident of this state, multiply the amount calculated under subd. 36. a. or b., by a fraction the numerator of which is the individual's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state and the denominator of which is the individual's total wages, salary, tips, unearned income, and net earnings from a trade or business. In this subd. 36. c., for married persons filing separately "wages, salary, tips, unearned income, and net earnings from a trade or business" means the separate wages, salary, tips, unearned income, and net earnings from a trade or business of each spouse, and for married persons filing jointly "wages, salary, tips, unearned income, and net earnings from a trade or business" means the total wages, salary, tips, unearned income, and net earnings from a trade or business of both spouses.

d. Reduce the amount calculated under subd. 36. a., b., or c. to the individual's aggregate wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state.

25,1288g Section 1288g. 71.05 (6) (b) 37. of the statutes is created to read:

71.05 (6) (b) 37. For taxable years beginning after December 31, 2007, and before January 1, 2009, an amount paid by an individual, other than a person to whom subd. 19. applies, who has no employer and no self-employment income, for medical care insurance for the individual, his or her spouse, and the individual's dependents, calculated as follows:

a. Sixty-six and seven-tenths percent of the amount paid by the individual for medical care insurance. In this subdivision, "medical care insurance" means a medical care insurance policy that covers the individual, his or her spouse, and the individual's dependents and provides surgical, medical, hospital, major medical, or other health service coverage, and includes payments made for medical care benefits under a self-insured plan, but "medical care insurance" does not include hospital indemnity policies or policies with ancillary benefits such as accident benefits or benefits for loss of income resulting from a total or partial inability to work because of illness, sickness, or injury.

b. From the amount calculated under subd. 37. a., subtract the amounts deducted from gross income for medical care insurance in the calculation of federal adjusted gross income.

c. For an individual who is a nonresident or part-year resident of this state, multiply the amount calculated under subd. 37. a. or b., by a fraction the numerator of which is the individual's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state and the denominator of which is the individual's total wages, salary, tips, unearned income, and net earnings from a trade or business. In this subd. 37. c., for married persons filing separately "wages, salary, tips, unearned income, and net earnings from a trade or business" means the separate wages, salary, tips, unearned income, and net earnings from a trade or business of each spouse, and for married persons filing jointly "wages, salary, tips, unearned income, and net earnings from a trade or business" means the total wages, salary, tips, unearned income, and net earnings from a trade or business of both spouses.

d. Reduce the amount calculated under subd. 37. a., b., or c. to the individual's aggregate wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state.

25,1288h Section 1288h. 71.05 (6) (b) 38. of the statutes is created to read:

71.05 (6) (b) 38. For taxable years beginning after December 31, 2008, an amount paid by an individual, other than a person to whom subd. 19. applies, who has no employer and no self-employment income, for medical care insurance for the individual, his or her spouse, and the individual's dependents, calculated as follows:

b. From the amount calculated under subd. 38. a., subtract the amounts deducted from gross income for medical care insurance in the calculation of federal adjusted gross income.

c. For an individual who is a nonresident or part-year resident of this state, multiply the amount calculated under subd. 38. a. or b., by a fraction the numerator of which is the individual's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state and the denominator of which is the individual's total wages, salary, tips, unearned income, and net earnings from a trade or business. In this subd. 38. c., for married persons filing separately "wages, salary, tips, unearned income, and net earnings from a trade or business" means the separate wages, salary, tips, unearned income, and net earnings from a trade or business of each spouse, and for married persons filing jointly "wages, salary, tips, unearned income, and net earnings from a trade or business" means the total wages, salary, tips, unearned income, and net earnings from a trade or business of both spouses.

d. Reduce the amount calculated under subd. 38. a., b., or c. to the individual's aggregate wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state.

25,1289 Section 1289. 71.05 (22) (f) 4. a. of the statutes is amended to read:

71.05 (22) (f) 4. a. For taxable years beginning after December 31, 1997, in the case of a taxpayer with respect to whom a deduction an exemption under s. 71.07 (8) sub. (23) (b) 2. is allowable to another person, the Wisconsin standard deduction shall be the lesser of the amount under subd. 4. b. or one of the amounts calculated under subd. 4. c., whichever amount under subd. 4. c. is greater.

25,1290 Section 1290. 71.05 (22) (g) of the statutes is amended to read:

71.05 (22) (g) Nonresidents. With respect to nonresident natural persons deriving income from property located, business transacted or personal or professional services performed in this state, including natural persons changing their domicile into or from this state, the Wisconsin standard deduction and itemized deductions are based on federal adjusted gross income, and as provided in par. (f) 4., and are limited by such fraction of that amount as Wisconsin adjusted gross income is of federal adjusted gross income. In this paragraph, for married persons filing separately "adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly "adjusted gross income" means the total adjusted gross income of both spouses.

25,1291 Section 1291. 71.05 (22) (h) of the statutes is amended to read:

71.05 (22) (h) Part-year residents. If a person and that person's spouse are not both domiciled in this state during the entire taxable year, the Wisconsin standard deduction or itemized deduction on a joint return is determined by multiplying the Wisconsin standard deduction or itemized deduction, each calculated on the basis of federal adjusted gross income, and as provided in par. (f) 4., by a fraction the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income. For a married person who is not domiciled in this state for the entire taxable year and who files a separate return, the Wisconsin standard deduction and itemized deduction are determined under par. (g).

25,1293 Section 1293. 71.07 (2di) (b) 1. of the statutes is repealed.

25,1294 Section 1294. 71.07 (2dL) (c) 1. of the statutes is repealed.

25,1295 Section 1295. 71.07 (2dL) (c) 2. of the statutes is renumbered 71.07 (2dL) (c).

25,1296 Section 1296. 71.07 (2dL) (d) of the statutes is amended to read:

71.07 (2dL) (d) Except as provided in par. (c) 2., the carry-over provisions of s. 71.28 (4) (e) and (f) as they relate to the credit under s. 71.28 (4) relate to the credit under this subsection and apply as if the development zone continued to exist.

25,1297 Section 1297. 71.07 (2dm) (hm) of the statutes is amended to read:

71.07 (2dm) (hm) Credits claimed A claimant may claim the credit under this subsection, including any credits carried over, may be offset only against the amount of the tax otherwise due under this subchapter attributable to income from the business operations of the claimant in the development zone; except that a claimant in a development zone under s. 560.795 (1) (e) may offset credits, including any credits carried over, against the amount of the tax otherwise due under this subchapter attributable to all of the claimant's income; and against the tax attributable to income from directly related business operations of the claimant.

25,1298 Section 1298. 71.07 (2dr) (a) of the statutes is amended to read:

71.07 (2dr) (a) Credit. Any person may credit against taxes otherwise due under this chapter an amount equal to 5% of the amount obtained by subtracting from the person's qualified research expenses, as defined in section 41 of the internal revenue code, except that "qualified research expenses" include only expenses incurred by the claimant in a development zone under subch. VI of ch. 560, except that a taxpayer may elect the alternative computation under section 41 (c) (4) of the Internal Revenue Code and that election applies until the department permits its revocation and except that "qualified research expenses" do not include compensation used in computing the credit under sub. (2dj) nor research expenses incurred before the claimant is certified for tax benefits under s. 560.765 (3), the person's base amount, as defined in section 41 (c) of the internal revenue code, in a development zone, except that gross receipts used in calculating the base amount means gross receipts from sales attributable to Wisconsin under s. 71.04 (7) (b) 1. and 2. and, (d), (df), and (dh) and research expenses used in calculating the base amount include research expenses incurred before the claimant is certified for tax benefits under s. 560.765 (3), in a development zone, if the claimant submits with the claimant's return a copy of the claimant's certification for tax benefits under s. 560.765 (3) and a statement from the department of commerce verifying the claimant's qualified research expenses for research conducted exclusively in a development zone. The rules under s. 73.03 (35) apply to the credit under this paragraph. The rules under sub. (2di) (f) and (g), as they apply to the credit under that subsection, apply to claims under this paragraph. Section 41 (h) of the internal revenue code does not apply to the credit under this paragraph.

25,1299 Section 1299. 71.07 (2dx) (a) 5. of the statutes is amended to read:

71.07 (2dx) (a) 5. "Member of a targeted group" means a person who resides in an empowerment zone, or an enterprise community, that the U.S. government designates area designated by the federal government as an economic revitalization area, a person who is employed in an unsubsidized job but meets the eligibility requirements under s. 49.145 (2) and (3) for a Wisconsin works Works employment position, a person who is employed in a trial job, as defined in s. 49.141 (1) (n), a person who is eligible for child care assistance under s. 49.155, a person who is a vocational rehabilitation referral, an economically disadvantaged youth, an economically disadvantaged veteran, a supplemental security income recipient, a general assistance recipient, an economically disadvantaged ex-convict, a qualified summer youth employee, as defined in 26 USC 51 (d) (7), a dislocated worker, as defined in 29 USC 2801 (9), or a food stamp recipient;, if the person has been certified in the manner under sub. (2dj) (am) 3. by a designated local agency, as defined in sub. (2dj) (am) 2.

25,1300 Section 1300. 71.07 (2dx) (b) (intro.) of the statutes is amended to read:

71.07 (2dx) (b) Credit. (intro.) Except as provided in pars. (be) and (bg) and in s. 73.03 (35), and subject to s. 560.785, for any taxable year for which the person is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3), 560.797 (4) or 560.798 (3), any person may claim as a credit against the taxes imposed on the person's income from the person's business activities in a development zone otherwise due under this chapter the following amounts:

25,1305 Section 1305. 71.07 (3m) (a) 1. b. of the statutes is amended to read:

71.07 (3m) (a) 1. b. For partnerships except publicly traded partnerships treated as corporations under s. 71.22 (1) (1k), or limited liability companies, except limited liability companies treated as corporations under s. 71.22 (1) (1k), "claimant" means each individual partner or member.

25,1306 Section 1306. 71.07 (3n) (title) of the statutes is amended to read:

71.07 (3n) (title) Dairy and livestock farm investment credit.

25,1310b Section 1310b. 71.07 (3n) (a) 2. (intro.) of the statutes is amended to read: