Amendment SSA3-SB483

LRBs0675/1

JK&CTS:all:pg

2005 - 2006 LEGISLATURE

SENATE SUBSTITUTE AMENDMENT 3, TO 2005 SENATE BILL 483

March 31, 2006 - Offered by Joint Committee on Finance.

SB483-SSA3,1,6 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2) (a) 10. and 77.92 (4); to repeal and recreate 71.08 (1) (intro.) and 71.08 (1) (intro.); and to create 71.07 (5e), 71.10 (4) (gy), 71.28 (5e), 71.30 (3) (es), 71.47 (5e), 71.49 (1) (es), 77.51 (6m) and 77.54 (48) of the statutes; relating to: an income and franchise tax credit and a sales and use tax exemption for Internet equipment used in the broadband market.

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

SB483-SSA3, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

SB483-SSA3,1,12 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), (3n), (3s), (3t), (5b), and (5d), and (5e) 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).

SB483-SSA3, s. 2 Section 2. 71.07 (5e) of the statutes is created to read:

SB483-SSA3,2,2 71.07 (5e) Internet equipment credit. (a) Definitions. In this subsection:

SB483-SSA3,2,3 1. "Claimant" means a person who files a claim under this subsection.

SB483-SSA3,2,6 2. "Internet equipment used in the broadband market" means equipment that is capable of transmitting data packets or Internet signals at speeds of at least 200 kilobits per second in either direction.

SB483-SSA3,2,13 (b) Filing claims. Subject to the limitations provided in this subsection and subject to 2005 Wisconsin Act .... (this act), section 17 , beginning in the first taxable year following the taxable year in which the claimant claims an exemption under s. 77.54 (48), a claimant may claim as a credit against the taxes imposed under ss. 71.02 and 71.08, up to the amount of those taxes, in each taxable year for 2 years, the amount certified by the department of commerce that the claimant claimed as an exemption under s. 77.54 (48).

SB483-SSA3,2,15 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48).

SB483-SSA3,2,24 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 their use of sales and use tax exemptions certified by the department of commerce as described under par. (b). 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 interests.

SB483-SSA3,3,3 3. The total amount of the credits and exemptions that may be claimed by all claimants under this subsection and ss. 71.28 (5e), 71.47 (5e), and 77.54 (48) is $7,500,000, as determined by the department of commerce.

SB483-SSA3,3,5 (d) 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.

SB483-SSA3, s. 3 Section 3 . 71.08 (1) (intro.) of the statutes, as affected by 2005 Wisconsin Acts 25 and 177, is repealed and recreated to read:

SB483-SSA3,3,16 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), (3n), (3s), (3t), (5b), (5d), (5e), (6), (6e), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m), (3), (3n), and (3t) and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m), (3), (3n), 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:

SB483-SSA3, s. 4 Section 4 . 71.08 (1) (intro.) of the statutes, as affected by 2005 Wisconsin Acts 25, 177 and .... (Assembly Bill 208), is repealed and recreated to read:

SB483-SSA3,4,3 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), (3c), (3e), (3m), (3n), (3s), (3t), (3w), (5b), (5d), (5e), (6), (6e), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m), (3), (3n), (3t), and (3w), and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m), (3), (3n), (3t), and (3w), 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:

SB483-SSA3, s. 5 Section 5. 71.10 (4) (gy) of the statutes is created to read:

SB483-SSA3,4,5 71.10 (4) (gy) Internet equipment credit under s. 71.07 (5e).

SB483-SSA3, s. 6 Section 6. 71.21 (4) of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB483-SSA3,4,10 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (5b), (5e), and (5g) and passed through to partners shall be added to the partnership's income.

SB483-SSA3, s. 7 Section 7. 71.26 (2) (a) of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB483-SSA3,5,5 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), (3g), (3n), (3t), (5b), (5e), and (5g) 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).

SB483-SSA3, s. 8 Section 8. 71.28 (5e) of the statutes is created to read:

SB483-SSA3,5,7 71.28 (5e) Internet equipment credit. (a) Definitions. In this subsection:

SB483-SSA3,5,8 1. "Claimant" means a person who files a claim under this subsection.

SB483-SSA3,5,11 2. "Internet equipment used in the broadband market" means equipment that is capable of transmitting data packets or Internet signals at speeds of at least 200 kilobits per second in either direction.

SB483-SSA3,5,18 (b) Filing claims. Subject to the limitations provided in this subsection and subject to 2005 Wisconsin Act .... (this act), section 17 , beginning in the first taxable year following the taxable year in which the claimant claims an exemption under s. 77.54 (48), a claimant may claim as a credit against the taxes imposed under s. 71.23, up to the amount of those taxes, in each taxable year for 2 years, the amount certified by the department of commerce that the claimant claimed as an exemption under s. 77.54 (48).

SB483-SSA3,5,20 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48).

SB483-SSA3,6,4 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 their use of sales and use tax exemptions certified by the department of commerce as described under par. (b). 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 interests.

SB483-SSA3,6,7 3. The total amount of the credits and exemptions that may be claimed by all claimants under this subsection and ss. 71.07 (5e), 71.47 (5e), and 77.54 (48) is $7,500,000, as determined by the department of commerce.

SB483-SSA3,6,9 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB483-SSA3, s. 9 Section 9. 71.30 (3) (es) of the statutes is created to read:

SB483-SSA3,6,11 71.30 (3) (es) Internet equipment credit under s. 71.28 (5e).

SB483-SSA3, s. 10 Section 10. 71.34 (1) (g) of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB483-SSA3,6,16 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), (3g), (3n), (3t), (5b), (5e), and (5g) and passed through to shareholders.

SB483-SSA3, s. 11 Section 11. 71.45 (2) (a) 10. of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB483-SSA3,6,24 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (3n), (5b), (5e), and (5g) 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).

SB483-SSA3, s. 12 Section 12. 71.47 (5e) of the statutes is created to read:

SB483-SSA3,7,1 71.47 (5e) Internet equipment credit. (a) Definitions. In this subsection:

SB483-SSA3,7,2 1. "Claimant" means a person who files a claim under this subsection.

SB483-SSA3,7,5 2. "Internet equipment used in the broadband market" means equipment that is capable of transmitting data packets or Internet signals at speeds of at least 200 kilobits per second in either direction.

SB483-SSA3,7,12 (b) Filing claims. Subject to the limitations provided in this subsection and subject to 2005 Wisconsin Act .... (this act), section 17 , beginning in the first taxable year following the taxable year in which the claimant claims an exemption under s. 77.54 (48), a claimant may claim as a credit against the taxes imposed under s. 71.43, up to the amount of those taxes, in each taxable year for 2 years, the amount certified by the department of commerce that the claimant claimed as an exemption under s. 77.54 (48).

SB483-SSA3,7,14 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48).

SB483-SSA3,7,23 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 their use of sales and use tax exemptions certified by the department of commerce as described under par. (b). 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 interests.

SB483-SSA3,8,3 3. The total amount of the credits and exemptions that may be claimed by all claimants under this subsection and ss. 71.07 (5e), 71.28 (5e), and 77.54 (48) is $7,500,000, as determined by the department of commerce.