Amendment ASA1-AB393

LRBs0217/2

JK:cmh:km

1999 - 2000 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 1999 ASSEMBLY BILL 393

January 4, 2000 - Offered by Representative Hoven.

AB393-ASA1,1,5 An Act to amend 71.05 (6) (a) 15., 71.26 (2) (a), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (5d), 71.10 (4) (cp), 71.28 (5d), 71.30 (3) (dm), 71.47 (5d) and 71.49 (1) (dm) of the statutes; relating to: income and franchise tax credits for a business to construct, equip and operate a day care center for the children of employes.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB393-ASA1, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB393-ASA1,1,11 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx) and, (3s) and (5d) 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).

AB393-ASA1, s. 2 Section 2. 71.07 (5d) of the statutes is created to read:

AB393-ASA1,2,1 71.07 (5d) Day care center credit. (a) In this subsection:

AB393-ASA1,2,2 1. "Claimant" means a person who files a claim under this subsection.

AB393-ASA1,2,4 2. "Equipment" means equipment that is depreciable property for income tax or franchise tax purposes.

AB393-ASA1,2,6 (b) A claimant may claim as a credit against the tax imposed under s. 71.02 any of the following:

AB393-ASA1,2,10 1. An amount equal to 50% of the amount paid by the claimant during the taxable year to construct, and purchase equipment for the use at, a licensed day care center under s. 48.65, that is owned and operated by the claimant to care for the children of the claimant's employes during the employes' working hours.

AB393-ASA1,2,16 2. An amount that is equal to the amount paid by the claimant to operate the claimant's day care center, as described under subd. 1., for the taxable year; minus any amount paid by an employe of the claimant to reimburse the claimant for any amount paid by the claimant under this subdivision; multiplied by 50%. A claimant may claim and be allocated a credit under this subdivision regardless of whether the claimant has claimed or been allocated a credit under subd. 1.

AB393-ASA1,2,22 3. An amount that is equal to the amount paid by the claimant during the taxable year to a licensed day care center under s. 48.65, other than a day care center as described under subd. 1., to provide care for the children of the claimant's employes during the employes' working hours; minus any amount paid by an employe of the claimant to reimburse the claimant for any amount paid by the claimant under this subdivision; multiplied by 50%.

AB393-ASA1,3,2 (c) Except as provided in par. (dm), the amount of the credit under this subsection shall not exceed $50,000 in a taxable year for each claimant and the total amount of the credit for all claimants under this subsection and ss. 71.28 (5d) and 71.47 (5d) shall not exceed $1,500,000 in a state fiscal year.

AB393-ASA1,3,11 (d) 1. No credit may be allowed under this subsection unless the claimant files annually an application with the department of revenue on or before March 1 and includes with that application a statement from the department of health and family services that verifies that the day care center under par. (b) is licensed under s. 48.65. A claimant may apply for and be allocated a credit under this subsection before the claimant pays expenses under par. (b), except that, if the claimant does not pay the expenses in the taxable year related to the credit, the claimant shall not receive the credit and the department of revenue may allocate the amount of the credit to another claimant.

AB393-ASA1,3,18 2. After March 1, the department shall allocate randomly the credits under this subsection and ss. 71.28 (5d) and 71.47 (5d). After the department has allocated the credits, the department shall compile a waiting list of claimants who were not allocated credits and shall allocate randomly any unused credits to the claimants on the waiting list. No credit may be allowed under this subsection after the department has awarded the total amount of the credit for all claimants under par. (c).

AB393-ASA1,3,25 (dm) Claimants who jointly construct, equip or operate a licensed day care center may jointly claim the credit as provided under this subsection, if the claimants file a joint application under par. (d) 1. Claimants who file a joint application and who are allocated a credit under par. (b) may apportion the amount of the credit among the joint claimants in any manner that the joint claimants choose, except that the total amount of the credit for the joint claimants shall not exceed $50,000 in a taxable year.

AB393-ASA1,4,2 (e) Section 71.28 (4) (e), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB393-ASA1,4,8 (f) If a credit computed under this subsection is not entirely offset against income or franchise taxes otherwise due, the unused balance may be carried forward and credited against income or franchise taxes otherwise due for the following 5 taxable years to the extent not offset by those taxes otherwise due in all intervening years between the year in which the expense was paid and the year in which the carry-forward credit is claimed.

AB393-ASA1,4,10 (g) A partnership, limited liability company or tax-option corporation may claim the credit under this subsection as an entity.

AB393-ASA1,4,12 (h) 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.

AB393-ASA1,4,18 (i) Except as provided under par. (j), if the operation of a day care center under par. (b) 1. ceases within 5 years after the date on which the construction of the day care center is completed, a claimant who receives credits under par. (b) 1. and 2. for the construction and operation of such a day care center shall add to the claimant's liability for taxes imposed under s. 71.02 an amount equal to the total amount of the credits received under par. (b) 1. and 2. multiplied by the following percentage:

AB393-ASA1,4,20 1. If the operation of the day care center ceases during the first year after the date on which the construction of the day care center is completed, 100%.

AB393-ASA1,4,22 2. If the operation of the day care center ceases during the 2nd year after the date on which the construction of the day care center is completed, 80%.

AB393-ASA1,4,24 3. If the operation of the day care center ceases during the 3rd year after the date on which the construction of the day care center is completed, 60%.

AB393-ASA1,5,2 4. If the operation of the day care center ceases during the 4th year after the date on which the construction of the day care center is completed, 40%.

AB393-ASA1,5,4 5. If the operation of the day care center ceases during the 5th year after the date on which the construction of the day care center is completed, 20%.

AB393-ASA1,5,11 (j) Paragraph (i) does not apply to a claimant whose business ceases operation within 5 years after the date on which the construction of the claimant's day care center is completed; or whose day care center ceases operation for not more than 30 consecutive days in a taxable year; or who presents evidence to the department of revenue that the majority of the claimant's employes with children who are eligible to enroll in the claimant's day center do not want to enroll their children in the claimant's day care center.

AB393-ASA1, s. 3 Section 3. 71.10 (4) (cp) of the statutes is created to read:

AB393-ASA1,5,13 71.10 (4) (cp) The day care center credit under s. 71.07 (5d).

AB393-ASA1, s. 4 Section 4. 71.26 (2) (a) of the statutes is amended to read:

AB393-ASA1,6,4 71.26 (2) (a) Corporations in general. The "net income" of a corporation means the gross income as computed under the internal revenue code as modified under sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit computed under s. 71.28 (1) and (3) to (5) plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds) and , (1dx) and (5d) 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 (1) (g) plus the amount of losses from the sale or other disposition of assets the gain from which would be wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and minus deductions, as computed under the internal revenue code as modified under sub. (3), plus or minus, as appropriate, an amount equal to the difference between the federal basis and Wisconsin basis of any asset sold, exchanged, abandoned or otherwise disposed of in a taxable transaction during the taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).

AB393-ASA1, s. 5 Section 5. 71.28 (5d) of the statutes is created to read:

AB393-ASA1,6,6 71.28 (5d) Day care center credit. (a) In this subsection:

AB393-ASA1,6,7 1. "Claimant" means a person who files a claim under this subsection.

AB393-ASA1,6,9 2. "Equipment" means equipment that is depreciable property for income tax or franchise tax purposes.

AB393-ASA1,6,11 (b) A claimant may claim as a credit against the tax imposed under s. 71.23 any of the following:

AB393-ASA1,6,15 1. An amount equal to 50% of the amount paid by the claimant during the taxable year to construct, and purchase equipment for the use at, a licensed day care center under s. 48.65, that is owned and operated by the claimant to care for the children of the claimant's employes during the employes' working hours.

AB393-ASA1,6,21 2. An amount that is equal to the amount paid by the claimant to operate the claimant's day care center, as described under subd. 1., for the taxable year; minus any amount paid by an employe of the claimant to reimburse the claimant for any amount paid by the claimant under this subdivision; multiplied by 50%. A claimant may claim and be allocated a credit under this subdivision regardless of whether the claimant has claimed or been allocated a credit under subd. 1.

AB393-ASA1,7,2 3. An amount that is equal to the amount paid by the claimant during the taxable year to a licensed day care center under s. 48.65, other than a day care center as described under subd. 1., to provide care for the children of the claimant's employes during the employes' working hours; minus any amount paid by an employe of the claimant to reimburse the claimant for any amount paid by the claimant under this subdivision; multiplied by 50%.

AB393-ASA1,7,6 (c) Except as provided in par. (dm), the amount of the credit under this subsection shall not exceed $50,000 in a taxable year for each claimant and the total amount of the credit for all claimants under this subsection and ss. 71.07 (5d) and 71.47 (5d) shall not exceed $1,500,000 in a state fiscal year.

AB393-ASA1,7,15 (d) 1. No credit may be allowed under this subsection unless the claimant files annually an application with the department of revenue on or before March 1 and includes with that application a statement from the department of health and family services that verifies that the day care center under par. (b) is licensed under s. 48.65. A claimant may apply for and be allocated a credit under this subsection before the claimant pays expenses under par. (b), except that, if the claimant does not pay the expenses in the taxable year related to the credit, the claimant shall not receive the credit and the department of revenue may allocate the amount of the credit to another claimant.

AB393-ASA1,7,22 2. After March 1, the department shall allocate randomly the credits under this subsection and ss. 71.07 (5d) and 71.47 (5d). After the department has allocated the credits, the department shall compile a waiting list of claimants who were not allocated credits and shall allocate randomly any unused credits to the claimants on the waiting list. No credit may be allowed under this subsection after the department has awarded the total amount of the credit for all claimants under par. (c).

AB393-ASA1,8,4 (dm) Claimants who jointly construct, equip or operate a licensed day care center may jointly claim the credit as provided under this subsection, if the claimants file a joint application under par. (d) 1. Claimants who file a joint application and who are allocated a credit under par. (b) may apportion the amount of the credit among the joint claimants in any manner that the joint claimants choose, except that the total amount of the credit for the joint claimants shall not exceed $50,000 in a taxable year.

AB393-ASA1,8,6 (e) Subsection (4) (e), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB393-ASA1,8,12 (f) If a credit computed under this subsection is not entirely offset against income or franchise taxes otherwise due, the unused balance may be carried forward and credited against income or franchise taxes otherwise due for the following 5 taxable years to the extent not offset by those taxes otherwise due in all intervening years between the year in which the expense was paid and the year in which the carry-forward credit is claimed.

AB393-ASA1,8,14 (g) A partnership, limited liability company or tax-option corporation may claim the credit under this subsection as an entity.

AB393-ASA1,8,16 (h) Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.