Amendment ASA1-AB507

LRBs0224/1

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2003 - 2004 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 2003 ASSEMBLY BILL 507

October 16, 2003 - Offered by Joint Committee on Finance.

AB507-ASA1,1,8 An Act to amend 71.05 (6) (a) 15., 71.07 (3s) (c) 1., 71.08 (1) (intro.), 71.21 (4), 71.26 (2) (a), 71.28 (3) (c) 1., 71.34 (1) (g), 71.45 (2) (a) 10., 71.47 (3) (c) 1., 77.54 (2) and 77.92 (4); and to create 71.05 (6) (b) 3m., 71.07 (3s) (c) 7., 71.07 (3t), 71.10 (4) (gbb), 71.28 (3) (c) 7., 71.28 (3t), 71.30 (3) (bb), 71.45 (2) (a) 10b., 71.47 (3) (c) 7., 71.47 (3t), 71.49 (1) (bb), 77.54 (30) (a) 6. and 560.28 of the statutes; relating to: the income and franchise tax credit for sales tax and use tax paid on fuel and electricity consumed in manufacturing and granting rule-making authority.

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

AB507-ASA1, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB507-ASA1,2,3 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), and (3s), and (3t) 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).

AB507-ASA1, s. 2 Section 2. 71.05 (6) (b) 3m. of the statutes is created to read:

AB507-ASA1,2,7 71.05 (6) (b) 3m. As provided under s. 71.07 (3s) (c) 7., the amount of the credit under s. 71.07 (3s) that the taxpayer added back to income under s. 71.05 (6) (a) at the time that the taxpayer first claimed the credit.

AB507-ASA1, s. 3 Section 3. 71.07 (3s) (c) 1. of the statutes is amended to read:

AB507-ASA1,2,16 71.07 (3s) (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 Except as provided in subd. 7., 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.

AB507-ASA1, s. 4 Section 4. 71.07 (3s) (c) 7. of the statutes is created to read:

AB507-ASA1,3,2 71.07 (3s) (c) 7. No credit may be claimed under this subsection for taxable years that begin after December 31, 2005. Credits that are claimed under this subsection for taxable years that begin before January 1, 2006, may be carried forward for the following 2 taxable years, and in each year for an amount equal to 50 percent of the taxpayer's unused credits, if the taxpayer has $25,000 or less in unused credits as of January 1, 2006. For taxable years beginning after December 31, 2005, and before January 1, 2008, a taxpayer who has more than $25,000 in unused credits as of January 1, 2006, may deduct an amount in each year that is equal to 50 percent of the amount the taxpayer added back to income under s. 71.05 (6) (a) at the time that the taxpayer first claimed the credit.

AB507-ASA1, s. 5 Section 5. 71.07 (3t) of the statutes is created to read:

AB507-ASA1,3,5 71.07 (3t) Manufacturing investment credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

AB507-ASA1,3,11 (b) Credit. Subject to the limitations provided in this subsection and in s. 560.28, for taxable years beginning after December 31, 2007, a claimant may claim as a credit, amortized over 15 taxable years starting with the taxable year beginning after December 31, 2007, against the tax imposed under s. 71.02 and 71.08, up to the amount of the tax, an amount equal to the claimant's unused credits under s. 71.07 (3s).

AB507-ASA1,3,14 (c) Limitations. 1. No credit may be claimed under this subsection unless the claimant submits with the claimant's return a copy of the claimant's certification by the department of commerce under s. 560.28.

AB507-ASA1,3,22 2. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on the amount of their unused credits under s. 71.07 (3s). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB507-ASA1,3,24 (d) Administration. Section 71.28 (4) (e), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB507-ASA1, s. 6 Section 6. 71.08 (1) (intro.) of the statutes is amended to read:

AB507-ASA1,4,9 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2fd), (3m), (3s), (3t), (6), (6s), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m) and, (3), and (3t) and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m) and, (3), and (3t) and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:

AB507-ASA1, s. 7 Section 7. 71.10 (4) (gbb) of the statutes is created to read:

AB507-ASA1,4,11 71.10 (4) (gbb) Manufacturing investment credit under s. 71.07 (3t).

AB507-ASA1, s. 8 Section 8. 71.21 (4) of the statutes is amended to read:

AB507-ASA1,4,15 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), and, (3s), and (3t) and passed through to partners shall be added to the partnership's income.

AB507-ASA1, s. 9 Section 9. 71.26 (2) (a) of the statutes is amended to read:

AB507-ASA1,5,9 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), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c) 7., the amount of the credit under s. 71.28 (3) that the taxpayer added to income under this paragraph at the time that the taxpayer first claimed the credit plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), and (3g), and (3t) 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).

AB507-ASA1, s. 10 Section 10. 71.28 (3) (c) 1. of the statutes is amended to read:

AB507-ASA1,5,17 71.28 (3) (c) 1. If Except as provided in subd. 7., if the credit computed under par. (b) is not entirely offset against Wisconsin income or franchise taxes otherwise due, the unused balance shall be carried forward and credited against Wisconsin income or franchise taxes otherwise due for the following 15 taxable years to the extent not offset by these 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.

AB507-ASA1, s. 11 Section 11. 71.28 (3) (c) 7. of the statutes is created to read:

AB507-ASA1,6,3 71.28 (3) (c) 7. No credit may be claimed under this subsection for taxable years that begin after December 31, 2005. Credits that are claimed under this subsection for taxable years that begin before January 1, 2006, may be carried forward for the following 2 taxable years, and in each year for an amount equal to 50 percent of the taxpayer's unused credits, if the taxpayer has $25,000 or less in unused credits as of January 1, 2006. For taxable years beginning after December 31, 2005, and before January 1, 2008, a taxpayer who has more than $25,000 in unused credits as of January 1, 2006, may deduct an amount in each year that is equal to 50 percent of the amount the taxpayer added back to income under s. 71.26 (2) (a) at the time that the taxpayer first claimed the credit.

AB507-ASA1, s. 12 Section 12. 71.28 (3t) of the statutes is created to read:

AB507-ASA1,6,6 71.28 (3t) Manufacturing investment credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

AB507-ASA1,6,11 (b) Credit. Subject to the limitations provided in this subsection and in s. 560.28, for taxable years beginning after December 31, 2007, a claimant may claim as a credit, amortized over 15 taxable years starting with the taxable year beginning after December 31, 2007, against the tax imposed under s. 71.23, up to the amount of the tax, an amount equal to the claimant's unused credits under s. 71.28 (3).

AB507-ASA1,6,14 (c) Limitations. 1. No credit may be claimed under this subsection unless the claimant submits with the claimant's return a copy of the claimant's certification by the department of commerce under s. 560.28.

AB507-ASA1,6,22 2. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on the amount of their unused credits under s. 71.28 (3). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB507-ASA1,6,24 (d) Administration. Subsection (4) (e), (g), and (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB507-ASA1, s. 13 Section 13. 71.30 (3) (bb) of the statutes is created to read:

AB507-ASA1,7,1 71.30 (3) (bb) Manufacturing investment credit under s. 71.28 (3t).

AB507-ASA1, s. 14 Section 14. 71.34 (1) (g) of the statutes is amended to read:

AB507-ASA1,7,5 71.34 (1) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), and (3g), and (3t) and passed through to shareholders.

AB507-ASA1, s. 15 Section 15. 71.45 (2) (a) 10. of the statutes is amended to read:

AB507-ASA1,7,12 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx) 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) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4) and (5).

AB507-ASA1, s. 16 Section 16. 71.45 (2) (a) 10b. of the statutes is created to read:

AB507-ASA1,7,16 71.45 (2) (a) 10b. By subtracting from federal taxable income, as provided under s. 71.47 (3) (c) 7., the amount of the credit under s. 71.47 (3) that the taxpayer added to income under subd. 10. at the time that the taxpayer first claimed the credit.

AB507-ASA1, s. 17 Section 17. 71.47 (3) (c) 1. of the statutes is amended to read:

AB507-ASA1,7,24 71.47 (3) (c) 1. If Except as provided in subd. 7., if the credit computed under par. (b) is not entirely offset against Wisconsin income or franchise taxes otherwise due, the unused balance shall be carried forward and credited against Wisconsin income or franchise taxes otherwise due for the following 15 taxable years to the extent not offset by these 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.

AB507-ASA1, s. 18 Section 18. 71.47 (3) (c) 7. of the statutes is created to read:

AB507-ASA1,8,10 71.47 (3) (c) 7. No credit may be claimed under this subsection for taxable years that begin after December 31, 2005. Credits that are claimed under this subsection for taxable years that begin before January 1, 2005, may be carried forward for the following 2 taxable years, and in each year for an amount equal to 50 percent of the taxpayer's unused credits, if the taxpayer has $25,000 or less in unused credits as of January 1, 2006. For taxable years beginning after December 31, 2005, and before January 1, 2008, a taxpayer who has more than $25,000 in unused credits as of January 1, 2006, may deduct an amount in each year that is equal to 50 percent of the amount the taxpayer added back to income under s. 71.45 (2) (a) 10. at the time that the taxpayer first claimed the credit.

AB507-ASA1, s. 19 Section 19. 71.47 (3t) of the statutes is created to read: