Amendment ASA1-AB100

AB100-ASA1,961,9 71.02 (1) For the purpose of raising revenue for the state and the counties, cities, villages and towns, there shall be assessed, levied, collected and paid a tax on all net incomes of individuals and fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds subject to the tax under s. 71.23 (2), by every natural person residing within the state or by his or her personal representative in case of death, and trusts administered within the state; by every nonresident natural person and trust of this state, upon such income as is derived from property located or business transacted within the state including, but not limited by enumeration, income derived from a limited partner's distributive share of partnership income, income derived from a limited liability company member's distributive share of limited liability company income, the state lottery under ch. 565, any multistate multijurisdictional lottery under ch. 565 if the winning lottery ticket or lottery share was purchased from a retailer, as defined in s. 565.01 (6), located in this state or from the department and pari-mutuel wager winnings or purses under ch. 562, and also by every nonresident natural person upon such income as is derived from the performance of personal services within the state, except as exempted under s. 71.05 (1) to (3). Every natural person domiciled in the state shall be deemed to be residing within the state for the purposes of determining liability for income taxes and surtaxes. A single-owner entity that is disregarded as a separate entity under section 7701 of the Internal Revenue Code is disregarded as a separate entity under this chapter, and its owner is subject to the tax on the entity's income.

AB100-ASA1, s. 1756 Section 1756. 71.04 (1) (a) of the statutes is amended to read:

AB100-ASA1,962,12 71.04 (1) (a) All income or loss of resident individuals and resident estates and trusts shall follow the residence of the individual, estate or trust. Income or loss of nonresident individuals and nonresident estates and trusts from business, not requiring apportionment under sub. (4), (10) or (11), shall follow the situs of the business from which derived. All items of income, loss and deductions of nonresident individuals and nonresident estates and trusts derived from a tax-option corporation not requiring apportionment under sub. (9) shall follow the situs of the business of the corporation from which derived. Income or loss of nonresident individuals and nonresident estates and trusts derived from rentals and royalties from real estate or tangible personal property, or from the operation of any farm, mine or quarry, or from the sale of real property or tangible personal property shall follow the situs of the property from which derived. Income from personal services of nonresident individuals, including income from professions, shall follow the situs of the services. A nonresident limited partner's distributive share of partnership income shall follow the situs of the business. A nonresident limited liability company member's distributive share of limited liability company income shall follow the situs of the business. Income of nonresident individuals, estates and trusts from the state lottery under ch. 565 is taxable by this state. Income of nonresident individuals, estates and trusts from any multistate multijurisdictional lottery under ch. 565 is taxable by this state, but only if the winning lottery ticket or lottery share was purchased from a retailer, as defined in s. 565.01 (6), located in this state or from the department. Income of nonresident individuals, nonresident trusts and nonresident estates from pari-mutuel winnings or purses under ch. 562 is taxable by this state. All other income or loss of nonresident individuals and nonresident estates and trusts, including income or loss derived from land contracts, mortgages, stocks, bonds and securities or from the sale of similar intangible personal property, shall follow the residence of such persons, except as provided in par. (b) and sub. (9).

AB100-ASA1, s. 2260m Section 2260m. 71.05 (6) (intro.) of the statutes is amended to read:

AB100-ASA1,962,15 71.05 (6) Modifications and transitional adjustments. (intro.) Some of the modifications referred to in s. 71.01 (13), and (14) and (15) are:

AB100-ASA1, s. 1757 Section 1757. 71.05 (6) (a) 15. of the statutes is amended to read:

AB100-ASA1,962,21 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dr) and, (2ds) , (2dx) and (3s) 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 (1) (g).

AB100-ASA1, s. 2261am Section 2261am. 71.05 (6) (a) 19. of the statutes is repealed.

AB100-ASA1, s. 2261b Section 2261b. 71.05 (6) (b) 24. of the statutes is repealed.

AB100-ASA1, s. 2261c Section 2261c. 71.05 (6) (b) 25. of the statutes is created to read:

AB100-ASA1,963,8 71.05 (6) (b) 25. All gains that are not excluded from taxation under subd. 9., on business assets or on assets used in farming, including shares in a corporation or trust that meets the standards under s. 182.001 (1), or both, held more than one year, that are sold or otherwise disposed of to persons who are related to the seller or transferor by blood, marriage or adoption within the 3rd degree of kinship as that term is used in s. 852.03 (2), as computed under the Internal Revenue Code, not including amounts treated as ordinary income for federal income tax purposes because of the recapture of depreciation or any other reason.

AB100-ASA1, s. 2261d Section 2261d. 71.05 (6) (b) 26. of the statutes is created to read:

AB100-ASA1,963,12 71.05 (6) (b) 26. For taxable years beginning on or after January 1, 1998, an amount paid by a person for a long-term care insurance policy for the person and his or her spouse, calculated as follows:

AB100-ASA1,963,21 a. One hundred percent of the amount paid by the person for a long-term care insurance policy. In this subdivision, "long-term care insurance policy" means a disability insurance policy or certificate advertised, marketed, offered or designed primarily to provide coverage for care that is provided in the insured person's home or in institutional and community-based settings and that is convalescent or custodial care or care for a chronic condition or terminal illness; the term does not include a medicare supplement policy or medicare replacement policy or a continuing care contract, as defined in s. 647.01 (2). "Long-term care insurance policy" applies to a policy that covers the person and his or her spouse.

AB100-ASA1,963,24 b. From the amount calculated under subd. 26. a., subtract the amounts deducted from gross income for a long-term care insurance policy in the calculation of federal adjusted gross income.

AB100-ASA1,964,5 c. For a person who is a nonresident or a part-year resident of this state, modify the amount calculated under subd. 26. b. by multiplying the amount by a fraction the numerator of which is the person's wages, unearned income and net earnings from a trade or business that are taxable by this state and the denominator of which is the person's total wages, unearned income and net earnings from a trade or business.

AB100-ASA1,964,8 d. Reduce the amount calculated under subd. 26. b. or c. to the person's aggregate wages, unearned income and net earnings from a trade or business that are taxable by this state.

AB100-ASA1, s. 2261f Section 2261f. 71.06 (2s) of the statutes is created to read:

AB100-ASA1,964,22 71.06 (2s) Nonresidents and part-year residents. For taxable years beginning after December 31, 1996, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under subs. (1) and (2) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this subsection, 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. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under subs. (1) and (2) on a joint return shall be multiplied 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.

AB100-ASA1, s. 2261h Section 2261h. 71.07 (2dd) (e) of the statutes is created to read:

AB100-ASA1,965,2 71.07 (2dd) (e) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

AB100-ASA1, s. 2261j Section 2261j. 71.07 (2de) (d) of the statutes is created to read:

AB100-ASA1,965,7 71.07 (2de) (d) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

AB100-ASA1, s. 2261k Section 2261k. 71.07 (2di) (i) of the statutes is created to read:

AB100-ASA1,965,12 71.07 (2di) (i) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

AB100-ASA1, s. 2261m Section 2261m. 71.07 (2dj) (i) of the statutes is created to read:

AB100-ASA1,965,17 71.07 (2dj) (i) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

AB100-ASA1, s. 2261p Section 2261p. 71.07 (2dL) (h) of the statutes is created to read:

AB100-ASA1,965,22 71.07 (2dL) (h) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

AB100-ASA1, s. 2261q Section 2261q. 71.07 (2dr) (a) of the statutes is amended to read:

AB100-ASA1,966,21 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) 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.

AB100-ASA1, s. 2261t Section 2261t. 71.07 (2dr) (i) of the statutes is created to read:

AB100-ASA1,967,2 71.07 (2dr) (i) Sunset. No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

AB100-ASA1, s. 2261v Section 2261v. 71.07 (2ds) (i) of the statutes is created to read:

AB100-ASA1,967,7 71.07 (2ds) (i) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.

AB100-ASA1, s. 1758 Section 1758. 71.07 (2dx) of the statutes is created to read:

AB100-ASA1,967,9 71.07 (2dx) Development zones credit. (a) Definitions. In this subsection:

AB100-ASA1,967,11 1. "Brownfield" means an industrial or commercial facility the expansion or redevelopment of which is complicated by environmental contamination.

AB100-ASA1,967,14 2. "Development zone" means a development zone under s. 560.70, a development opportunity zone under s. 560.795 or an enterprise development zone under s. 560.797.

AB100-ASA1,967,20 3. "Environmental remediation" means removal or containment of environmental pollution, as defined in s. 299.01 (4), and restoration of soil or groundwater that is affected by environmental pollution, as defined in s. 299.01 (4), in a brownfield if that removal, containment or restoration fulfills the requirement under sub. (2de) (a) 1. and investigation unless the investigation determines that remediation is required and that remediation is not undertaken.

AB100-ASA1,968,2 4. "Full-time job" means 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% of the federal minimum wage and receives benefits that are not required by federal or state law. "Full-time job" does not include initial training before an employment position begins.

AB100-ASA1,968,11 5. "Member of a targeted group" means a person under sub. (2dj) (am) 1., a person who resides in an empowerment zone, or an enterprise community, that the U.S. government designates, 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 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 the Wisconsin works health plan under s. 49.153 or a person who is eligible for child care assistance under s. 49.155; 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.

AB100-ASA1,968,14 (b) Credit. Except as provided in s. 73.03 (35) and subject to s. 560.785, for any taxable year for which the person is certified under s. 560.765 (3), any person may claim as a credit against taxes the following amounts:

AB100-ASA1,968,16 1. Fifty percent of the amount expended for environmental remediation in a development zone.

AB100-ASA1,968,20 2. The amount determined by multiplying the amount determined under s. 560.785 (1) (b) by the number of full-time jobs created in a development zone and filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

AB100-ASA1,968,24 3. The amount determined by multiplying the amount determined under s. 560.785 (1) (c) by the number of full-time jobs created in a development zone and not filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

AB100-ASA1,969,5 4. The amount determined by multiplying the amount determined under s. 560.785 (1) (b) by the number of full-time jobs retained, as provided in the rules under s. 560.785, excluding jobs for which a credit has been claimed under sub. (2dj), in a development zone and filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

AB100-ASA1,969,10 5. The amount determined by multiplying the amount determined under s. 560.785 (1) (c) by the number of full-time jobs retained, as provided in the rules under s. 560.785, excluding jobs for which a credit has been claimed under sub. (2dj), in a development zone and not filled by a member of a targeted group and by then subtracting the subsidies paid under s. 49.147 (3) (a) for those jobs.

AB100-ASA1,969,16 (c) Credit precluded. If the certification of a person for tax benefits under s. 560.765 (3) is revoked, that person may not claim credits under this subsection for the taxable year that includes the day on which the certification is revoked or succeeding taxable years and that person may not carry over unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which certification is revoked or succeeding taxable years.

AB100-ASA1,969,21 (d) Carry-over precluded. If a person who is certified under s. 560.765 (3) for tax benefits ceases business operations in the development zone during any of the taxable years that that zone exists, that person may not carry over to any taxable year following the year during which operations cease any unused credits from the taxable year during which operations cease or from previous taxable years.

AB100-ASA1,970,2 (e) 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. Subsection (2dj) (c), as it applies to the credit under sub. (2dj), applies to the credit under this subsection. Claimants shall include with their returns a copy of their certification for tax benefits and a copy of the department of commerce's verification of their expenses.

AB100-ASA1, s. 2262m Section 2262m. 71.07 (3s) of the statutes is created to read:

AB100-ASA1,970,4 71.07 (3s) Manufacturing sales tax credit. (a) In this subsection:

AB100-ASA1,970,5 1. "Manufacturing" has the meaning given in s. 77.54 (6m).

AB100-ASA1,970,9 2. "Sales and use tax under ch. 77 paid by the person" includes use taxes paid directly by the person and sales and use taxes paid by the person's supplier and passed on to the person whether separately stated on the invoice or included in the total price.

AB100-ASA1,970,18 (b) The tax imposed under s. 71.02 shall be reduced by an amount equal to the sales and use tax under ch. 77 paid by the person in such taxable year on fuel and electricity consumed in manufacturing tangible personal property in this state. Shareholders in a tax-option corporation and partners may claim the credit under this subsection, based on eligible sales and use taxes paid by the partnership or tax-option corporation, in proportion to the ownership interest of each partner or shareholder. The partnership or tax-option corporation shall calculate the amount of the credit which may be claimed by each partner or shareholder and shall provide that information to the partner or shareholder.

AB100-ASA1,971,2 (c) 1. The credit under par. (b), including any credits carried over, may be offset only against the amount of the tax imposed upon or measured by the business operations of the claimant in which the fuel and electricity are consumed. If the credit computed is not entirely offset against taxes otherwise due, the unused balance shall be carried forward and credited against taxes otherwise due for the following 15 taxable years to the extent not offset by taxes otherwise due in all intervening years between the year in which the expense was incurred and the year in which the carry-forward credit is claimed.

AB100-ASA1,971,5 2. For shareholders in a tax-option corporation, the credit may be offset only against the tax imposed on the shareholder's prorated share of the tax-option corporation's income.

AB100-ASA1,971,7 3. For partners, the credit may be offset only against the tax imposed on the partner's distributive share of partnership income.

AB100-ASA1,971,10 4. If a tax-option corporation becomes liable for tax, the corporation may offset the credit against the tax due, with any remaining credit passing through to the shareholders.

AB100-ASA1,971,14 5. If a corporation that is not a tax-option corporation has a carry-over credit and becomes a tax-option corporation before the credit carried over is used, the unused portion of the credit may be used by the tax-option corporation's shareholders on a prorated basis.

AB100-ASA1,971,19 6. If the shareholders of a tax-option corporation have carry-over credits and the corporation becomes a corporation other than a tax-option corporation after the effective date of this subdivision .... [revisor inserts date], and before the credits carried over are used, the unused portion of the credits may be used by the corporation that is not a tax-option corporation.

AB100-ASA1, s. 2262n Section 2262n. 71.07 (5) (a) 7. of the statutes is repealed.

AB100-ASA1, s. 2262nm Section 2262nm. 71.07 (5) (a) 15. of the statutes is amended to read:

AB100-ASA1,972,2 71.07 (5) (a) 15. The amount claimed as a deduction for medical care insurance under section 213 of the internal revenue code Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b) 17. to 20. and the amount claimed as a deduction for a long-term care insurance policy under section 213 (d) (1) (D) of the Internal Revenue Code, as defined in section 7702B (b) of the Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b) 26.

AB100-ASA1, s. 2262np Section 2262np. 71.07 (5m) of the statutes is created to read:

AB100-ASA1,972,4 71.07 (5m) Working families tax credit. (a) Definitions. In this subsection:

AB100-ASA1,972,6 1. "Claimant" means an individual who is eligible to claim the credit under this subsection.

AB100-ASA1,972,7 2. "Department" means the department of revenue.

AB100-ASA1,972,9 3. "Household" means a claimant and an individual related to the claimant as husband or wife.

AB100-ASA1,972,11 4. "Net tax liability" means a claimant's income tax liability after he or she completes the computations listed in s. 71.10 (4) (a) to (dr).

AB100-ASA1,972,14 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, one of the following amounts:

AB100-ASA1,972,17 1. If the claimant is single and his or her adjusted gross income is less than $9,000 in the year to which the claim relates, an amount equal to his or her net tax liability.

AB100-ASA1,972,20 2. If the claimant is single and his or her adjusted gross income is at least $9,000 but less than $10,000 in the year to which the claim relates, an amount that is calculated as follows:

AB100-ASA1,972,23 a. Calculate the value of a fraction, the denominator of which is $1,000 and the numerator of which is the difference between the claimant's adjusted gross income and $9,000.

AB100-ASA1,972,24 b. Subtract from 1.0 the amount that is calculated under subd. 2. a.

AB100-ASA1,973,2 c. Multiply the amount of the claimant's net income tax liability by the amount that is calculated under subd. 2. b.

AB100-ASA1,973,6 3. If the claimant is married and filing jointly and the sum of the claimant's adjusted gross income and his or her spouse's adjusted gross income is less than $18,000 in the year to which the claim relates, an amount equal to the married couple's net tax liability.

AB100-ASA1,973,10 4. If the claimant is married and filing jointly and the sum of the claimant's adjusted gross income and his or her spouse's adjusted gross income is at least $18,000 but less than $19,000 in the year to which the claim relates, an amount that is calculated as follows:

AB100-ASA1,973,13 a. Calculate the value of a fraction, the denominator of which is $1,000 and the numerator of which is the difference between the married couple's adjusted gross income and $18,000.

AB100-ASA1,973,14 b. Subtract from 1.0 the amount that is calculated under subd. 4. a.

AB100-ASA1,973,16 c. Multiply the amount of the married couple's net income tax liability by the amount that is calculated under subd. 4. b.

AB100-ASA1,973,19 5. If the claimant is married and filing separately and his or her adjusted gross income is less than $9,000 in the year to which the claim relates, an amount equal to his or her net tax liability.

AB100-ASA1,973,22 6. If the claimant is married and filing separately and his or her adjusted gross income is at least $9,000 but less than $10,000 in the year to which the claim relates, an amount that is calculated as follows:

AB100-ASA1,973,25 a. Calculate the value of a fraction, the denominator of which is $1,000 and the numerator of which is the difference between the claimant's adjusted gross income and $9,000.

AB100-ASA1,974,1 b. Subtract from 1.0 the amount that is calculated under subd. 6. a.

AB100-ASA1,974,3 c. Multiply the amount of the claimant's net income tax liability by the amount that is calculated under subd. 6. b.

AB100-ASA1,974,5 (c) Limitations. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

AB100-ASA1,974,7 2. Part-year residents and nonresidents of this state are not eligible for the credit under this subsection.