Amendment SA1-SSA1-SB40

SB40-SSA1-SA1, s. 1874n Section 1874n. 66.0137 (4m) (b) of the statutes is amended to read:

SB40-SSA1-SA1,100,18 66.0137 (4m) (b) A political subdivision and one or more other political subdivisions, that together have at least 100 employees, may jointly provide health care benefits not provided under the Healthy Wisconsin Plan under ch. 260 to their officers and employees on a self insured self-insured basis.

SB40-SSA1-SA1, s. 1874t Section 1874t. 66.0137 (5) of the statutes is amended to read:

SB40-SSA1-SA1,101,5 66.0137 (5) Hospital, accident, and life insurance. The Subject to s. 260.37, the state or a local governmental unit may provide for the payment of premiums for hospital, surgical and other health and accident insurance and life insurance for employees and officers and their spouses and dependent children. A local governmental unit may also provide for the payment of premiums for hospital and surgical care for its retired employees. In addition, a local governmental unit may, by ordinance or resolution, elect to offer to all of its employees a health care coverage plan through a program offered by the group insurance board under ch. 40. A local governmental unit that elects to participate under s. 40.51 (7) is subject to the applicable sections of ch. 40 instead of this subsection.".

SB40-SSA1-SA1,101,7 340. Page 841, line 21: delete the material beginning with that line and ending with page 842, line 18.

SB40-SSA1-SA1,101,9 341. Page 843, line 10: delete the material beginning with that line and ending with page 844, line 14.

SB40-SSA1-SA1,101,10 342. Page 844, line 14: after that line insert:

SB40-SSA1-SA1,101,11 " Section 1932s. 70.11 (39) of the statutes is amended to read:

SB40-SSA1-SA1,101,21 70.11 (39) Computers. If the owner of the property fulfills the requirements under s. 70.35, mainframe computers, minicomputers, personal computers, networked personal computers, servers, terminals, monitors, disk drives, electronic peripheral equipment, tape drives, printers, basic operational programs, systems software, and prewritten software. The exemption under this subsection does not apply to automatic teller machines, custom software, fax machines, copiers, equipment with embedded computerized components or telephone systems, including equipment that is used to provide telecommunications services, as defined in s. 76.80 (3). For the purposes of s. 79.095, the exemption under this subsection does not apply to property that is otherwise exempt under this chapter.".

SB40-SSA1-SA1,101,22 343. Page 844, line 14: after that line insert:

SB40-SSA1-SA1,101,24 " Section 1932r. 70.11 (21) (a) of the statutes is renumbered 70.11 (21) (am) and amended to read:

SB40-SSA1-SA1,102,15 70.11 (21) (am) All property purchased or constructed as a waste treatment facility used for the treatment of exclusively and directly to remove, store, or cause a physical or chemical change in industrial wastes, as defined in s. 281.01 (5), waste or air contaminants, as defined in s. 285.01 (1), but not for other wastes, as defined in s. 281.01 (7), for the purpose of abating or eliminating pollution of surface waters, the air, or waters of the state if that property is not used to grow agricultural products for sale and, if the property's owner is taxed under ch. 76, if the property is approved by the department of revenue. For the purposes of this subsection, "industrial waste" also includes wood chips, sawdust, and other wood residue from the paper and wood products manufacturing process that can be used as fuel and would otherwise be considered superfluous, discarded, or fugitive material. The department of natural resources and department of health and family services shall make recommendations upon request to the department of revenue regarding such property. All property purchased or upon which construction began prior to July 31, 1975, shall be subject to s. 70.11 (21), 1973 stats.

SB40-SSA1-SA1, s. 1932t Section 1932t. 70.11 (21) (ab) of the statutes is created to read:

SB40-SSA1-SA1,102,17 70.11 (21) (ab) In this subsection:

SB40-SSA1-SA1,102,18 1. "Air contaminants" has the meaning given in s. 285.01 (1).

SB40-SSA1-SA1,102,23 2. "Industrial waste" means waste resulting from any process of industry, trade, or business, or the development of any natural resource, that has no monetary or market value, except as provided in subd. 3. b., and that would otherwise be considered superfluous, discarded, or fugitive material. "Industrial waste" does not include other wastes, as defined in s. 281.01 (7).

SB40-SSA1-SA1,102,25 3. "Used exclusively" means to the exclusion of all other uses except any of the following:

SB40-SSA1-SA1,103,1 a. For other use not exceeding 5 percent of total use.

SB40-SSA1-SA1,103,7 b. To produce heat or steam for a manufacturing process, if the fuel consists of either 95 percent or more industrial waste that would otherwise be considered superfluous, discarded, or fugitive material or 50 percent or more of wood chips, sawdust, or other wood residue from the paper and wood products manufacturing process, if the wood chips, sawdust, or other wood residue would otherwise be considered superfluous, discarded, or fugitive material.".

SB40-SSA1-SA1,103,8 344. Page 844, line 14: after that line insert:

SB40-SSA1-SA1,103,9 " Section 1934c. 70.11 (41p) of the statutes is created to read:

SB40-SSA1-SA1,103,12 70.11 (41p) Healthy Wisconsin Authority. All property owned by the Healthy Wisconsin Authority, provided that use of the property is primarily related to the purposes of the authority.".

SB40-SSA1-SA1,103,13 345. Page 845, line 6: after that line insert:

SB40-SSA1-SA1,103,14 " Section 1935p. 70.32 (2) (c) 1g. of the statutes is amended to read:

SB40-SSA1-SA1,103,18 70.32 (2) (c) 1g. "Agricultural land" means land, exclusive of buildings and improvements and the land necessary for their location and convenience, that is devoted primarily to agricultural use, as defined by rule, not including any land that is platted and zoned for residential, commercial, or industrial use.".

SB40-SSA1-SA1,103,19 346. Page 875, line 2: after that line insert:

SB40-SSA1-SA1,103,20 " Section 1959c. 71.05 (6) (b) 44. of the statutes is created to read:

SB40-SSA1-SA1,103,23 71.05 (6) (b) 44. For taxable years beginning after December 31, 2006, the amount of any incentive payment received by an individual under s. 23.33 (5r) in the taxable year to which the claim relates.".

SB40-SSA1-SA1,103,24 347. Page 881, line 10: delete lines 10 to 13.

SB40-SSA1-SA1,104,1 348. Page 881, line 22: delete lines 22 to 25.

SB40-SSA1-SA1,104,2 349. Page 882, line 1: delete lines 1 to 4.

SB40-SSA1-SA1,104,3 350. Page 889, line 1: delete "(2) (b) and" and substitute "(2) (b) and".

SB40-SSA1-SA1,104,4 351. Page 891, line 10: delete "(2) (b) and" and substitute "(2) (b) and".

SB40-SSA1-SA1,104,5 352. Page 894, line 6: delete "(2) (b) and" and substitute "(2) (b) and".

SB40-SSA1-SA1,104,6 353. Page 896, line 21: delete "(2) (b) and" and substitute "(2) (b) and".

SB40-SSA1-SA1,104,7 354. Page 899, line 9: delete "(2) (b) and" and substitute "(2) (b) and".

SB40-SSA1-SA1,104,8 355. Page 901, line 19: delete "(2) (b) and".

SB40-SSA1-SA1,104,9 356. Page 903, line 21: delete "(2) (b) and".

SB40-SSA1-SA1,104,10 357. Page 922, line 2: after that line insert:

SB40-SSA1-SA1,104,11 " Section 2017d. 71.22 (9a) of the statutes is created to read:

SB40-SSA1-SA1,104,18 71.22 (9a) "Qualified real estate investment trust" means a real estate investment trust, except a real estate investment trust of which more than 50 percent of the voting power or value of the beneficial interests or shares are owned or controlled, directly or indirectly, by a single entity that is subject to sections 301 to 385 of the Internal Revenue Code, that is not exempt under s. 71.26 (1), and that is not a real estate investment trust or a qualified real estate trust subsidiary under section 856 (i) of the Internal Revenue Code.

SB40-SSA1-SA1, s. 2017e Section 2017e. 71.22 (9b) of the statutes is created to read:

SB40-SSA1-SA1,105,2 71.22 (9b) "Qualified regulated investment company" means a regulated investment company, except a regulated investment company of which more than 50 percent of the voting power or value of the beneficial interests or shares are owned or controlled, directly or indirectly, by a single entity that is subject to sections 301 to 385 of the Internal Revenue Code, that is not exempt under s. 71.26 (1), and that is not a regulated investment company.

SB40-SSA1-SA1, s. 2017f Section 2017f. 71.22 (9c) of the statutes is created to read:

SB40-SSA1-SA1,105,5 71.22 (9c) "Real estate investment trust" means a real estate investment trust under section 856 of the Internal Revenue Code.

SB40-SSA1-SA1, s. 2017g Section 2017g. 71.22 (9d) of the statutes is created to read:

SB40-SSA1-SA1,105,8 71.22 (9d) "Real estate mortgage investment conduit" means a real estate mortgage investment conduit under section 860D of the Internal Revenue Code.

SB40-SSA1-SA1, s. 2017h Section 2017h. 71.22 (9e) of the statutes is created to read:

SB40-SSA1-SA1,105,11 71.22 (9e) "Regulated investment company" means a regulated investment company under section 851 of the Internal Revenue Code.".

SB40-SSA1-SA1,105,12 358. Page 922, line 2: after that line insert:

SB40-SSA1-SA1,105,13 " Section 2017d. 71.22 (9) of the statutes is amended to read:

SB40-SSA1-SA1,105,19 71.22 (9) "Person" includes corporations, unless the context requires otherwise. "Person" may include, as determined by the department, any individual, partnership, general partner of a partnership, limited liability company, registered limited liability partnership, foreign limited liability partnership, syndicate, estate, trust, trustee in bankruptcy, receiver, executor, administrator, assignee, or organization.".

SB40-SSA1-SA1,105,20 359. Page 922, line 19: after that line insert:

SB40-SSA1-SA1,105,21 " Section 2018g. 71.255 of the statutes is created to read:

SB40-SSA1-SA1,105,22 71.255 Combined reporting. (1) Definitions. In this section:

SB40-SSA1-SA1,106,3 (a) "Combined group" means the group of all persons whose income and apportionment factors are considered under sub. (2) to determine the taxpayer's share of the net business income or loss that is apportionable to this state.

SB40-SSA1-SA1,106,6 (b) "Combined report" means a return under s. 71.24 that is filed on a form prescribed by the department that specifies the income, credits, and tax of each taxpayer member of a commonly controlled group operating as a unitary business.

SB40-SSA1-SA1,106,8 (c) "Commonly controlled group" means any of the following, but does not include an insurer that is exempt from taxation under s. 71.45 (1):

SB40-SSA1-SA1,106,15 1. A parent corporation and any corporation or chain of corporations that are connected to the parent corporation by direct or indirect ownership by the parent corporation if the parent corporation owns stock representing more than 50 percent of the voting power of at least one of the connected corporations or if the parent corporation or any of the connected corporations owns stock that cumulatively represents more than 50 percent of the voting power of each of the connected corporations.

SB40-SSA1-SA1,106,18 2. Any 2 or more corporations if a common owner, regardless of whether or not the owner is a corporation, directly or indirectly owns stock representing more than 50 percent of the voting power of the corporations or the connected corporations.

SB40-SSA1-SA1,106,20 3. Any 2 or more corporations if stock representing more than 50 percent of the voting power in each corporation are interests that cannot be separately transferred.

SB40-SSA1-SA1,106,25 4. Any 2 or more corporations if stock representing more than 50 percent of the voting power in each corporation is directly owned by, or for the benefit of, family members. In this subdivision, "family member" means an individual related by blood, marriage, or adoption within the 2nd degree of kinship as computed under s. 852.03 (2), 1995 stats., or the spouse of such an individual.

SB40-SSA1-SA1,107,7 (d) "Corporation" means a corporation, as defined in s. 71.22 (1k), that, regardless of where the corporation is located, would be subject to the taxes imposed under this chapter, if the corporation were doing business in this state. For purposes of this section, the business conducted by a pass-through entity that is directly or indirectly held by a corporation is considered the corporation's business proportionate to the corporation's distributive share of the pass-through entity's income. "Corporation" does not include a tax-option corporation.

SB40-SSA1-SA1,107,8 (e) "Department" means the department of revenue.

SB40-SSA1-SA1,107,12 (f) "Internal Revenue Code" means the Internal Revenue Code as defined in s. 71.22 (4) and (4m), including any provision of a federal tax treaty that expressly applies to the states of the United States, but not including any other application of a federal tax treaty.

SB40-SSA1-SA1,107,17 (g) "Pass-through entity" means a general or limited partnership, any organization that is treated as a partnership for purposes of this chapter, a real estate investment trust, a regulated investment company, a real estate mortgage investment conduit, a financial asset securitization investment trust, a trust, or an estate.

SB40-SSA1-SA1,107,21 (h) "Tax haven" means a jurisdiction that, for any taxable year, is identified by the organization for economic cooperation and development as a tax haven or as having a harmful, preferential tax regime or has no, or a nominal, effective tax on income and all of the following apply:

SB40-SSA1-SA1,107,24 1. The jurisdiction has laws or practices that prevent the effective exchange of information, for tax purposes, with other governments on taxpayers benefiting from the tax regime.

SB40-SSA1-SA1,108,5 2. The details of the legislative, legal, or administrative provisions of the jurisdiction's tax regime are not publicly available and apparent or are not consistently applied to similarly situated taxpayers or the information needed by tax authorities to determine a taxpayer's correct tax liability, including accounting records and underlying documentation, is not adequately available.

SB40-SSA1-SA1,108,8 3. The jurisdiction facilitates the establishment of foreign-owned entities without requiring a local substantive presence or prohibits such entities from having any commercial impact on the local economy.

SB40-SSA1-SA1,108,11 4. The tax regime explicitly or implicitly excludes the jurisdiction's resident taxpayers from taking advantage of the tax regime's benefits or prohibits enterprises that benefit from the regime from operating in the jurisdiction's domestic market.

SB40-SSA1-SA1,108,15 5. The jurisdiction has created a tax regime that is favorable for tax avoidance, based upon an overall assessment of relevant factors, including whether the jurisdiction has a significant untaxed offshore financial or other services sector relative to its overall economy.

SB40-SSA1-SA1,108,17 (i) "Taxpayer member" means a corporation that is subject to tax under s. 71.23 (1) or (2) and that is a member of a combined group.

SB40-SSA1-SA1,109,14 (j) "Unitary business" means a single economic enterprise that consists of separate parts of a single business entity or of a commonly controlled group of business entities that are sufficiently interdependent, integrated, and interrelated by their activities so as to provide a synergy and a mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts. For purposes of this section, 2 or more business entities are considered a unitary business if the entities have unity of ownership, operation, and use, as indicated by centralized management or a centralized executive force; centralized purchasing, advertising, or accounting; intercorporate sales or leases; intercorporate services; intercorporate debts; intercorporate use of proprietary materials; interlocking directorates; or interlocking corporate officers. Any business conducted by a pass-through entity that is owned directly or indirectly by a corporation is considered conducted by the corporation, to the extent of the corporation's distributive share of the pass-through entity's income, regardless of the percentage of the corporation's ownership interest. A business conducted directly or indirectly by one corporation is unitary with that portion of a business conducted by another corporation through its direct or indirect interest in a pass-through entity, if the corporations are sufficiently interdependent, integrated, and interrelated by their activities so as to provide a synergy and a mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts and the two corporations are members of the same commonly controlled group.

SB40-SSA1-SA1,109,19 (2) Corporations required to use combined reporting. (a) A corporation engaged in a unitary business with any other corporation shall file a combined report that includes the income, determined under sub. (3), and apportionment factor, determined under sub. (5) and s. 71.25, of the following members of the unitary business:

SB40-SSA1-SA1,109,23 1. Any member incorporated in the United States, including the District of Columbia and any territory or possession of the United States, or formed under the laws of any state, the District of Columbia, or any territory or possession of the United States.

SB40-SSA1-SA1,109,25 2. Any member, regardless of where the entity is incorporated or formed, if the average of the following ratios is 20 percent or more:

SB40-SSA1-SA1,110,7 a. The value of the member's real property and tangible personal property located in the United States, including the District of Columbia and any territory or possession of the United States, not including property that is used to produce nonapportionable income, divided by the value of all of the member's real property and tangible personal property, not including property that is used to produce nonapportionable income. For purposes of this subd. 2. a., the value of property that the member rents is the net annual rental amount for the property, multiplied by 8.

SB40-SSA1-SA1,110,15 b. The amount of the member's payroll that is paid in the United States, including the District of Columbia and any territory or possession of the United States, divided by the amount of the member's total payroll. For purposes of this subd. 2. b., payroll includes compensation paid to employees, but does not include payroll used to produce nonapportionable income. The payroll paid in the United States, including the District of Columbia and any territory or possession of the United States, shall be determined in the same manner as payroll is determined for this state under s. 71.25 (8) (b) 1. to 5.

SB40-SSA1-SA1,110,21 c. The member's sales in the United States, including the District of Columbia and any territory or possession of the United States, divided by the member's total sales. For purposes of this subd. 2. c., sales include items identified in s. 71.25 (9) (e), but not items identified in s. 71.25 (9) (f), and the situs of a sale shall be determined in the same manner as for state sales in s. 71.25 (9) (b), (d), (df), and (dh), not including s. 71.25 (9) (b) 2m. and 3., (c), (df) 3., and (dh) 4.

SB40-SSA1-SA1,110,25 3. Any member that is a domestic international sales corporation as described in sections 991 to 994 of the Internal Revenue Code, a foreign sales corporation as described in sections 921 to 927 of the Internal Revenue Code, or an export trade corporation as described in sections 970 to 971 of the Internal Revenue Code.

SB40-SSA1-SA1,111,9 4. Any member that is a controlled foreign corporation as defined in section 957 of the Internal Revenue Code, to the extent of the member's income that is defined in section 952 of of the Internal Revenue Code, including any lower-tier subsidiary's distribution of such income that was previously taxed, determined without regard to federal treaties, and the apportionment factors related to that income. For purposes of this subdivision, any item of income received by a controlled foreign corporation is excluded if the income was subject to an income tax imposed by a foreign country at an effective tax rate greater than 90 percent of the maximum tax rate specified in section 11 of the Internal Revenue Code.

SB40-SSA1-SA1,111,13 5. Any member that earns more than 20 percent of its income, directly or indirectly, from intangible property or service-related activities that are deductible against the business income of other members of the combined group, to the extent of that income and the apportionment factors related to that income.

SB40-SSA1-SA1,111,19 6. Any member that is doing business in a tax haven, if the member is engaged in an activity that is sufficient for that tax haven jurisdiction to impose a tax under federal law. If the member's business activity in a tax haven is entirely outside the scope of the laws and practices that cause the jurisdiction to be a tax haven, the member's business activity is not considered to be conducted in a tax haven for purposes of this section.

SB40-SSA1-SA1,111,24 7. Any member not described in subds. 1. to 6., to the extent that its income is derived from or attributable to sources within the United States, including the District of Columbia and any territory or possession of the United States, as determined under the Internal Revenue Code and by its apportionment factors related to that income.

SB40-SSA1-SA1,112,6 (b) The department may require that a combined report filed under this section include the income and associated apportionment factors of any persons not described under par. (a) that are members of a unitary business to reflect the proper apportionment of income of the entire unitary business, including persons that are not, or would not be, subject to the taxes imposed under this chapter if doing business in this state.

SB40-SSA1-SA1,112,9 (3) Components of income subject to tax. Each taxpayer member is responsible for the tax imposed under this chapter based on its taxable income or loss apportioned or allocated to this state, including:

SB40-SSA1-SA1,112,11 (a) Its share of any business income apportionable to this state of each of the combined groups of which it is a member, as determined under subs. (4) and (5).

SB40-SSA1-SA1,112,14 (b) Its share of any business income apportionable to this state of a distinct business activity conducted in and outside this state wholly by the taxpayer member, as determined under s. 71.25.