Amendment ASA1-SB40

SB40-ASA1,1019,2 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2007, and before January 1, 2018, a claimant may claim as a credit against the taxes imposed under s. 71.43, up to the amount of the taxes, an amount that is equal to 25 percent of the amount that the claimant paid in the taxable year to install or retrofit pumps located in this state that dispense motor vehicle fuel consisting of at least 85 percent ethanol or at least 20 percent biodiesel fuel.

SB40-ASA1,1019,6 (c) Limitations. 1. The maximum amount of the credit that a claimant may claim under this subsection in a taxable year is an amount that is equal to $5,000 for each service station for which the claimant has installed or retrofitted pumps as described under par. (b).

SB40-ASA1,1019,14 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 payment of amounts 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.

SB40-ASA1,1019,16 (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.

SB40-ASA1, s. 2116m Section 2116m. 71.47 (5k) of the statutes is created to read:

SB40-ASA1,1019,19 71.47 (5k) Community rehabilitation program credit. (a) Definitions. In this subsection:

SB40-ASA1,1019,20 1. "Claimant" means a person who files a claim under this subsection.

SB40-ASA1,1019,25 2. "Community rehabilitation program" means a nonprofit entity, county, municipality, or state or federal agency that directly provides, or facilitates the provision of, vocational rehabilitation services to individuals who have disabilities to maximize the employment opportunities, including career advancement, of such individuals.

SB40-ASA1,1020,2 3. "Vocational rehabilitation services" include education, training, employment, counseling, therapy, placement, and case management.

SB40-ASA1,1020,5 4. "Work" includes production, packaging, assembly, food service, custodial service, clerical service, and other commercial activities that improve employment opportunities for individuals who have disabilities.

SB40-ASA1,1020,11 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after July 1, 2007, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, an amount equal to 5 percent of the amount the claimant paid in the taxable year to a community rehabilitation program to perform work for the claimant's business, pursuant to a contract.

SB40-ASA1,1020,15 (c) Limitations. 1. The maximum amount of the credit that any claimant may claim under this subsection in a taxable year is $25,000 for each community rehabilitation program for which the claimant enters into a contract to have the community rehabilitation program perform work for the claimant's business.

SB40-ASA1,1020,20 2. No credit may be claimed under this subsection unless the claimant submits with the claimant's return a form, as prescribed by the department of revenue, that verifies that the claimant has entered into a contract with a community rehabilitation program and that the program has received payment from the claimant for work provided by the program, consistent with par. (b).

SB40-ASA1,1021,3 3. 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 payment of amounts 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.

SB40-ASA1,1021,5 (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.

SB40-ASA1, s. 2116n Section 2116n. 71.49 (1) (bn) of the statutes is created to read:

SB40-ASA1,1021,7 71.49 (1) (bn) Community rehabilitation program credit under s. 71.47 (5k).

SB40-ASA1, s. 1829 Section 1829. 71.49 (1) (dd) of the statutes is created to read:

SB40-ASA1,1021,10 71.49 (1) (dd) Dairy manufacturing facility investment credit under s. 71.47 (3p).

SB40-ASA1, s. 1830 Section 1830. 71.49 (1) (ds) of the statutes is created to read:

SB40-ASA1,1021,12 71.49 (1) (ds) Ethanol and biodiesel fuel pump credit under s. 71.47 (5j).

SB40-ASA1, s. 1831 Section 1831. 71.49 (1) (epa) of the statutes is created to read:

SB40-ASA1,1021,14 71.49 (1) (epa) Electronic medical records credit under s. 71.47 (5i).

SB40-ASA1, s. 1832 Section 1832. 71.49 (1) (epp) of the statutes is renumbered 71.49 (1) (eps) and amended to read:

SB40-ASA1,1021,17 71.49 (1) (eps) Film production services credit under s. 71.47 (5f) (b) 1. and 3.

SB40-ASA1, s. 1833 Section 1833. 71.49 (1) (f) of the statutes is amended to read:

SB40-ASA1,1021,22 71.49 (1) (f) The total of farmers' drought property tax credit under s. 71.47 (1fd), farmland preservation credit under subch. IX, farmland tax relief credit under s. 71.47 (2m), enterprise zone jobs credit under s. 71.47 (3w), film production services credit under s. 71.28 (5f) (b) 2., and estimated tax payments under s. 71.48.

SB40-ASA1, s. 2121s Section 2121s. 71.54 (1) (f) (intro.) of the statutes is amended to read:

SB40-ASA1,1022,3 71.54 (1) (f) 2001 and thereafter. (intro.) The Subject to sub. (2m), the amount of any claim filed in 2001 and thereafter and based on property taxes accrued or rent constituting property taxes accrued during the previous year is limited as follows:

SB40-ASA1, s. 2121t Section 2121t. 71.54 (2) (b) 3. of the statutes is amended to read:

SB40-ASA1,1022,6 71.54 (2) (b) 3. In Subject to sub. (2m), in calendar year 1990 or any subsequent calendar year, $1,450.

SB40-ASA1, s. 1834 Section 1834. 71.54 (2m) of the statutes is created to read:

SB40-ASA1,1022,21 71.54 (2m) Indexing for inflation; 2007 and thereafter. (a) For taxable years beginning after December 31, 2006, the dollar amounts for the threshold income under sub. (1) (f) 1. and 2., the maximum household income under sub. (1) (f) 3., and the maximum property taxes under sub. (2) (b) 3. shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 2005, as determined by the federal department of labor. Each amount that is revised under this paragraph shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this paragraph and incorporate the changes into the income tax forms and instructions.

SB40-ASA1,1023,2 (b) The department of revenue shall annually adjust the slope under sub. (1) (f) 2. such that as a claimant's income increases from the threshold income as calculated under par. (a), to an amount that exceeds the maximum household income as calculated under par. (a), the credit that may be claimed is reduced to $0 and the department of revenue shall incorporate the changes into the income tax forms and instructions.

SB40-ASA1, s. 1835 Section 1835. 71.738 (1d) of the statutes is repealed.

SB40-ASA1, s. 1836 Section 1836. 71.738 (2d) of the statutes is repealed.

SB40-ASA1, s. 1837 Section 1837. 71.74 (14) of the statutes is amended to read:

SB40-ASA1,1023,21 71.74 (14) Additional remedy to collect tax. The department may also proceed under s. 71.91 (5) for the collection of any additional assessment of income or franchise taxes or surtaxes, after notice thereof has been given under sub. (11) and before the same shall have become delinquent, when it has reasonable grounds to believe that the collection of such additional assessment will be jeopardized by delay. In such cases notice of the intention to so proceed shall be given by registered mail to the taxpayer, and the warrant of the department shall not issue if the taxpayer within 10 days after such notice furnishes a bond in such amount, not exceeding double the amount of the tax, and with such sureties as the department shall approve, conditioned upon the payment of so much of the additional taxes as shall finally be determined to be due, together with interest thereon as provided by s. 71.82 (1) (a). Nothing in this subsection shall affect the review of additional assessments provided by ss. 71.88 (1) (a) and (2) (a), 71.89 (2), 73.01, and 73.015, and any amounts collected under this subsection shall be deposited with the secretary of administration department and disbursed after final determination of the taxes as are amounts deposited under s. 71.90 (2).

SB40-ASA1, s. 1838 Section 1838. 71.765 of the statutes is repealed.

SB40-ASA1, s. 1839 Section 1839. 71.775 (3) (a) 2. of the statutes is amended to read:

SB40-ASA1,1024,2 71.775 (3) (a) 2. The partner, member, shareholder, or beneficiary has no Wisconsin income other than his or her partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state and his or her share of such income is less than $1,000.

SB40-ASA1, s. 1840 Section 1840. 71.775 (3) (a) 3. of the statutes is created to read:

SB40-ASA1,1024,11 71.775 (3) (a) 3. The nonresident partner, member, shareholder, or beneficiary files an affidavit with the department, in the form and manner prescribed by the department, whereby the nonresident partner, member, shareholder, or beneficiary agrees to file a Wisconsin income or franchise tax return and be subject to the personal jurisdiction of the department, the tax appeals commission, and the courts of this state for the purpose of determining and collecting Wisconsin income and franchise taxes, including estimated tax payments, together with any related interest and penalties.

SB40-ASA1, s. 1841 Section 1841. 71.775 (4) (b) 2. of the statutes is amended to read:

SB40-ASA1,1024,24 71.775 (4) (b) 2. A pass-through entity that pays the tax withheld under sub. (2) as provided under subd. 1. is not subject to an underpayment of estimated tax under s. 71.09 or 71.29, if 90 percent of the tax that is due for the current taxable year is paid by the unextended due date or if 100 percent of the tax that is due for the taxable year immediately preceding the current taxable year is paid by the unextended due date and the taxable year immediately preceding the current taxable year was a 12-month period. Interest Except as provided in par. (f), interest at the rate of 12 percent shall be imposed on the unpaid amount of the tax withheld due under sub. (2) during any extension period and interest at the rate of 18 percent shall be imposed on the unpaid amount of the tax withheld due under sub. (2) for the period beginning with the extended due date and ending with the date that the unpaid amount is paid in full.

SB40-ASA1, s. 1842 Section 1842. 71.775 (4) (d) of the statutes is amended to read:

SB40-ASA1,1025,9 71.775 (4) (d) A nonresident partner, member, shareholder, or beneficiary of a pass-through entity may claim a credit, as prescribed by the department, on his or her Wisconsin income or franchise tax return for the amount withheld under sub. (2) on his or her behalf for the tax period for which the income of the pass-through entity is reported. For purposes of this paragraph determining whether interest under s. 71.84 applies to a nonresident partner, member, shareholder, or beneficiary, the amount withheld under sub. (2) is considered to be paid on the last day of the pass-through entity's taxable year for which the tax is paid in 4 equal quarterly installments.

SB40-ASA1, s. 1843 Section 1843. 71.775 (4) (f) of the statutes is amended to read:

SB40-ASA1,1025,21 71.775 (4) (f) If a pass-through entity subject to withholding under this section fails to withhold pay the tax as required by this section, the pass-through entity shall be liable for any unpaid tax, interest, and penalties otherwise assessable to the nonresident partner, member, shareholder, or beneficiary with respect to income from the pass-through entity. If a nonresident partner, member, shareholder, or beneficiary of the pass-through entity files a return and pays the tax due, the pass-through entity shall not be liable for the tax, but shall be liable for any interest and penalties otherwise applicable for failure to withhold, as the penalty provided under ss. 71.82 (2) (d) and s. 71.83 (1) (a) 1. and for any interest otherwise assessable to the nonresident partner, member, shareholder, or beneficiary with respect to income from the pass-through entity.

SB40-ASA1, s. 1844 Section 1844. 71.80 (20) of the statutes is amended to read:

SB40-ASA1,1026,3 71.80 (20) Magnetic media Electronic filing. If the internal revenue service requires a person to file information returns or wage statements on magnetic media or in other machine-readable form electronically for federal income tax purposes, the person shall also file the comparable state information returns or wage statements on magnetic media or in other machine-readable form electronically with the department of revenue for income or franchise tax purposes.

SB40-ASA1, s. 1845 Section 1845. 71.805 of the statutes is created to read:

SB40-ASA1,1026,6 71.805 Tax avoidance transactions voluntary compliance program. (1) Definitions. In this section:

SB40-ASA1,1026,13 (a) "Tax avoidance transaction" means a transaction, plan, or arrangement devised for the principal purpose of avoiding federal or Wisconsin income or franchise tax. "Tax avoidance transaction" includes a listed transaction as provided under U.S. department of the treasury regulations as of the effective date of this paragraph .... [revisor inserts date], and may include a transaction, as determined by the department, that provides a tax benefit for Wisconsin income or franchise tax purposes without providing a similar benefit for federal income tax purposes.

SB40-ASA1,1026,16 (b) "Taxpayer" means a person who is subject to the taxes imposed under this chapter and who has a tax liability attributable to using a tax avoidance transaction for any taxable year beginning before January 1, 2007.

SB40-ASA1,1026,18 (2) Penalty waiver or abatement. All of the following apply with regard to a taxpayer who satisfies the conditions under sub. (3):

SB40-ASA1,1026,22 (a) Except as provided under sub. (4) (b), the department shall waive or abate all penalties that are applicable to the underreporting or underpayment of Wisconsin income or franchise taxes attributable to using a tax avoidance transaction for any taxable year for which the taxpayer satisfies the conditions under sub. (3).

SB40-ASA1,1026,25 (b) The department shall not seek a criminal prosecution against the taxpayer with respect to using a tax avoidance transaction for any taxable year for which the taxpayer satisfies the conditions under sub. (3).

SB40-ASA1,1027,3 (3) Taxpayer eligibility. A taxpayer is eligible for the benefits described under sub. (2) (a) and (b), if, during the period beginning on October 1, 2007, and ending on February 29, 2008, the taxpayer does the following:

SB40-ASA1,1027,9 (a) Files an amended Wisconsin tax return for each taxable year for which the taxpayer has previously filed a Wisconsin tax return that uses a tax avoidance transaction to underreport the taxpayer's Wisconsin income or franchise tax liability and the amended return reports the total Wisconsin net income and tax for the taxable year, computed without regard to any tax avoidance transaction and without regard to any other adjustment that is unrelated to any tax avoidance transaction.

SB40-ASA1,1027,17 (b) Pays, in full, for each taxable year for which an amended return is filed under par. (a), the entire amount of Wisconsin income or franchise tax and interest due that is attributable to using a tax avoidance transaction, except that the secretary of revenue may enter into an agreement with the taxpayer to make payments in installments. A taxpayer who does not comply with an installment agreement provided under this paragraph is ineligible to receive the benefits described under sub. (2) (a) and (b) and the total amount of tax, interest, and penalties shall be immediately due and payable.

SB40-ASA1,1027,21 (4) Limitations and administration. (a) A taxpayer who receives the benefits described under sub. (2) may not file an appeal or a claim for credit or refund with respect to the tax avoidance transactions for the taxable years for which the taxpayer satisfied the conditions under sub. (3).

SB40-ASA1,1027,25 (b) The department may not waive or abate a penalty as provided under sub. (2) (a) if the penalty relates to an amount of Wisconsin income and franchise tax that is attributable to a tax avoidance transaction and assessed or paid prior to October 1, 2007, or after February 29, 2008.

SB40-ASA1, s. 1846 Section 1846. 71.81 of the statutes is created to read:

SB40-ASA1,1028,2 71.81 Disclosing reportable transactions. (1) Definitions. In this section:

SB40-ASA1,1028,8 (a) "Listed transaction" means any reportable transaction that is the same as, or substantially similar to, a transaction, plan, or arrangement specifically identified by the U.S. secretary of the treasury as a listed transaction, for purposes of section 6011 of the Internal Revenue Code and that is specifically identified by the U.S. secretary of the treasury as a listed transaction on or after the date the transaction occurred.

SB40-ASA1,1028,13 (b) "Material advisor" means any person who provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction and who, directly or indirectly, derives gross income from providing such aid, assistance, or advice in an amount that exceeds the threshold amount.

SB40-ASA1,1028,18 (c) "Reportable transaction" means any transaction, plan, or arrangement, including a listed transaction, for which a taxpayer is required to submit information to the department because the taxpayer is required to disclose the transaction, plan, or arrangement for federal income tax purposes for the taxable year in which the transaction occurred, as provided under U.S. department of treasury regulations.

SB40-ASA1,1028,21 (d) "Tax shelter" means any entity, plan, or arrangement, if avoiding or evading federal income tax or Wisconsin income or franchise tax is a significant purpose of the entity, plan, or arrangement.

SB40-ASA1,1028,22 (e) "Threshold amount" means the following:

SB40-ASA1,1028,24 1. In the case of a reportable transaction, not including a listed transaction, from which the tax benefits are provided primarily to an individual, $50,000.

SB40-ASA1,1029,2 2. In the case of a listed transaction from which the tax benefits are provided primarily to an individual, $10,000.

SB40-ASA1,1029,5 3. In the case of a reportable transaction, not including a listed transaction, from which the tax benefits are provided primarily to an entity and not an individual, $250,000.

SB40-ASA1,1029,7 4. In the case of a listed transaction, from which the tax benefits are provided primarily to an entity and not an individual, $25,000.

SB40-ASA1,1029,24 (2) Disclosure. For each taxable year in which a taxpayer has participated in a reportable transaction, the taxpayer shall file with the department a copy of any form required by the internal revenue service for disclosing the reportable transaction for federal income tax purposes no later than 60 days after the date for which the taxpayer is required to file the form for federal income tax purposes, except that, if the taxpayer has filed a form with the internal revenue service on or before the effective date of this subsection .... [revisor inserts date], the taxpayer shall file a copy of the form with the department no later than February 29, 2008. The department may require that forms filed with the department under this subsection be filed separately from this state's income or franchise tax return. This subsection applies to any reportable transaction entered into on or after January 1, 2001, or any reportable transaction entered into prior to January 1, 2001, that reduced the taxpayer's tax liability for taxable years beginning on or after January 1, 2001, for any taxable year for which the transaction remains undisclosed and for which the statute of limitations on assessment, including any extension provided under sub. (6), has not expired as of the date that is 60 days after the effective date of this subsection .... [revisor inserts date].

SB40-ASA1,1030,3 (3) Penalty for failing to disclose. (a) Any taxpayer who does not file the form under sub. (2) and who is required to file the form is subject to the following penalty:

SB40-ASA1,1030,6 1. If the taxpayer participated in a reportable transaction that is not a listed transaction, the lesser of $15,000 or 10 percent of the tax benefit obtained from the reportable transaction.

SB40-ASA1,1030,7 2. If the taxpayer participated in a listed transaction, $30,000.

SB40-ASA1,1030,13 (b) The secretary of revenue may waive or abate any penalty imposed under this subsection, or any portion of such penalty, related to a reportable transaction that is not a listed transaction, if the waiver or abatement promotes compliance with this section and effective tax administration. Notwithstanding any other law or rule, a determination by the secretary of revenue under this paragraph may not be reviewed in any judicial proceeding.

SB40-ASA1,1030,23 (c) The penalties imposed under this subsection apply to any failure to disclose a listed transaction entered into on or after January 1, 2001, or entered into prior to January 1, 2001, that reduced the taxpayer's tax liability for taxable years beginning on or after January 1, 2001, including transactions that were not listed transactions when entered into, but became listed transactions before the effective date of this paragraph .... [revisor inserts date], or any other reportable transaction entered into after the effective date of this paragraph .... [revisor inserts date], for any taxable year for which the statute of limitations on assessment, including any extension under sub. (6), has not expired as of the effective date of this paragraph .... [revisor inserts date].

SB40-ASA1,1031,4 (4) Understatement penalty. (a) If a taxpayer has a reportable transaction understatement, as determined in par. (b), the taxpayer shall pay, in addition to any tax owed with regard to the reportable transaction, an amount equal to either 20 percent of the reportable transaction understatement or, in the case of a reportable transaction that is not disclosed as provided in sub. (2), 30 percent of the reportable transaction understatement.

SB40-ASA1,1031,6 (b) A taxpayer has a reportable transaction understatement if the following calculation results in a positive number:

SB40-ASA1,1031,15 1. Multiply the taxpayer's highest applicable tax rate under s. 71.06, 71.27, or 71.46, by the amount of any increase in Wisconsin taxable income that results from the difference between the proper tax treatment of a reportable transaction and the taxpayer's treatment of the transaction as shown on the taxpayer's tax return, including any amended return the taxpayer files before the date on which the department first contacts the taxpayer regarding an examination of the taxable year for which the amended return is filed. For purposes of this subdivision, the amount of any increase in Wisconsin taxable income for a taxable year includes any reduction in the amount of loss available for carry-forward to the subsequent year.

SB40-ASA1,1031,19 2. Add the amount determined under subd. 1. to the amount of any decrease in the aggregate amount of Wisconsin income or franchise tax credits that results from the difference between the proper tax treatment of a reportable transaction and the taxpayer's treatment of the transaction as shown on the taxpayer's tax return.

SB40-ASA1,1032,8 (c) The secretary of revenue may waive or abate any penalty imposed under this subsection, or any portion of such penalty, if the taxpayer demonstrates to the department that the taxpayer had reasonable cause to act the way the taxpayer did, and in good faith, with regard to the tax treatment for which the taxpayer is subject to a penalty under this subsection and all facts relevant to the tax treatment are adequately disclosed in the filing under sub. (2), except that, if the taxpayer does not fully disclose such facts under sub. (2), the taxpayer's penalty may be waived or abated under this paragraph if the taxpayer demonstrates to the department that the taxpayer reasonably believed that the tax treatment for which the taxpayer is subject to a penalty under this subsection was more likely than not the proper treatment and substantial authority exists or existed for the tax treatment for which the taxpayer is subject to a penalty under this subsection. Notwithstanding any other law or rule, a determination by the secretary of revenue under this paragraph may not be reviewed in any judicial proceeding.

SB40-ASA1,1032,15 (d) The penalties under par. (a) apply to any reportable transaction understatement from a reportable transaction, including a listed transaction, entered into on or after January 1, 2001, or entered into prior to January 1, 2001, that reduced the taxpayer's tax liability for taxable years beginning on or after January 1, 2001, for any taxable year for which the statute of limitations on assessment, including any extension provided under sub. (6), has not expired as of the effective date of this paragraph .... [revisor inserts date].

SB40-ASA1,1032,22 (5) Additional understatement penalty. (a) 1. In addition to the penalty under sub. (4) (a), a taxpayer who files an amended return after February 29, 2008, and before the taxpayer is contacted by the internal revenue service or the department regarding a reportable transaction is subject to a penalty in an amount equal to 50 percent of the interest assessed under s. 71.82 on any reportable transaction understatement, as determined under sub. (4) (b), for the tax period for which the taxpayer files an amended return.

SB40-ASA1,1033,4 2. If the internal revenue service or the department contacts a taxpayer after February 29, 2008, regarding a reportable transaction and the taxpayer is contacted before the taxpayer files an amended return with respect to that transaction, the taxpayer is subject to a penalty in an amount equal to the interest assessed under s. 71.82 on any reportable transaction understatement, as determined under sub. (4) (b), for the tax period for which the internal revenue service or the department contacts the taxpayer.

SB40-ASA1,1033,11 (b) The penalties under par. (a) apply to any reportable transaction understatement resulting from a reportable transaction, including a listed transaction, entered into on or after January 1, 2001, or entered into prior to January 1, 2001, that reduced the taxpayer's tax liability for taxable years beginning on or after January 1, 2001, for any taxable year for which the statute of limitations on assessment, including any extension provided under sub. (6), has not expired as of the effective date of this paragraph .... [revisor inserts date].