AB40-ASA1,1304 18Section 1304. 71.05 (6) (b) 42. a. of the statutes is amended to read:
AB40-ASA1,706,319 71.05 (6) (b) 42. a. One hundred percent of the amount paid by the individual
20for medical care insurance, not including any amount that is paid with a premium
21assistance credit amount under 26 USC 36B
. In this subdivision, "medical care
22insurance" means a medical care insurance policy that covers the individual, his or
23her spouse, and the individual's dependents and provides surgical, medical, hospital,
24major medical, or other health service coverage, and includes payments made for
25medical care benefits under a self-insured plan, but "medical care insurance" does

1not include hospital indemnity policies or policies with ancillary benefits such as
2accident benefits or benefits for loss of income resulting from a total or partial
3inability to work because of illness, sickness, or injury.
AB40-ASA1,1304d 4Section 1304d. 71.05 (6) (b) 47. am. of the statutes is amended to read:
AB40-ASA1,706,135 71.05 (6) (b) 47. am. For taxable years beginning after December 31, 2010, and
6before January 1, 2014,
for 2 consecutive taxable years beginning with the taxable
7year in which the claimant's business locates to this state from another state or
8another country and begins doing business in this state, as defined in s. 71.22 (1r),
9and subject to the limitations provided under subd. 47. d. and e., the profit or loss
10from a trade or business as reported on federal income tax return schedules C and
11F or their equivalents, plus ordinary gain or loss on the sale of business assets, as
12determined under s. 71.01 (6), but not less than zero, multiplied by the
13apportionment fraction determined in s. 71.04 (4) and subject to s. 71.04 (7).
AB40-ASA1,1304e 14Section 1304e. 71.05 (6) (b) 47. b. of the statutes is amended to read:
AB40-ASA1,707,1015 71.05 (6) (b) 47. b. With respect to partners and members of limited liability
16companies, for taxable years beginning after December 31, 2010, and before January
171, 2014,
for 2 consecutive taxable years beginning with the taxable year in which the
18partnership's or limited liability company's business locates to this state from
19another state or another country and begins doing business in this state, as defined
20in s. 71.22 (1r), and subject to the limitations provided under subd. 47. d. and e., the
21partner's or member's distributive share of taxable income as calculated under
22section 703 of the Internal Revenue Code; plus the items of income and gain under
23section 702 of the Internal Revenue Code, including taxable state and municipal
24bond interest and excluding nontaxable interest income or dividend income from
25federal government obligations; minus the items of loss and deduction under section

1756702 of the Internal Revenue Code, except items that are not deductible under s.
271.21; plus guaranteed payments to partners under section 707 (c) of the Internal
3Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL),
4(2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t),
5(3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), and (8r); and plus or minus, as
6appropriate, transitional adjustments, depreciation differences, and basis
7differences under s. 71.05 (13), (15), (16), (17), and (19), multiplied by the
8apportionment fraction determined in s. 71.04 (4) and subject to s. 71.04 (7) or by
9separate accounting. No amounts subtracted under this subd. 47. b. may be included
10in the modification under par. (b) 9. or 9m.
AB40-ASA1,1304f 11Section 1304f. 71.05 (6) (b) 47. c. of the statutes is amended to read:
AB40-ASA1,707,2212 71.05 (6) (b) 47. c. With respect to shareholders of a tax-option corporation, for
13taxable years beginning after December 31, 2010, and before January 1, 2014, for 2
14consecutive taxable years beginning with the taxable year in which the tax-option
15corporation's business locates to this state from another state or another country and
16begins doing business in this state, as defined in s. 71.22 (1r), and subject to the
17limitations provided under subd. 47. d. and e., the shareholder's distributive share
18of the entity's net income or loss as determined under this chapter, including interest
19income from federal, state, and municipal government obligations, multiplied by the
20apportionment fraction determined in s. 71.25 (6m) and subject to s. 71.25 (9) or by
21separate accounting. No amounts subtracted under this subdivision may be included
22in the modification under par. (b) 9. or 9m.
AB40-ASA1,1304fm 23Section 1304fm. 71.05 (6) (b) 48m. of the statutes is created to read:
AB40-ASA1,708,724 71.05 (6) (b) 48m. For taxable years that begin after December 31, 2012, any
25amount of income received by an individual who is on active duty in the U.S. armed

1forces, as defined in 26 USC 7701 (a) (15), and who dies while on active duty if the
2individual's death occurred while he or she was serving in a combat zone or as a result
3of wounds, disease, or injury incurred while serving in a combat zone. The
4subtraction in this subdivision applies to the income that is received by the
5individual in the year in which he or she dies, and in the year immediately preceding
6that year if the individual has not filed a return for the year before the year in which
7he or she dies.
AB40-ASA1,1304g 8Section 1304g. 71.05 (6) (b) 49. of the statutes is created to read:
AB40-ASA1,708,129 71.05 (6) (b) 49. a. Subject to the definitions provided in subd. 49. b. to g. and
10the limitations specified in subd. 49. h. to j. for taxable years beginning after
11December 31, 2013, tuition expenses that are paid by a claimant for tuition for a pupil
12to attend an eligible institution.
AB40-ASA1,708,1513 b. In this subdivision, "claimant" means an individual who claims a pupil as
14a dependent under section 151 (c) of the Internal Revenue Code on his or her tax
15return.
AB40-ASA1,708,1716 c. In this subdivision, "elementary pupil" means an individual who is enrolled
17in grades kindergarten to 8 at an eligible institution.
AB40-ASA1,708,1918 d. In this subdivision, "eligible institution" means a private school, as defined
19in s. 115.001 (3r), that meets all of the criteria under s. 118.165 (1).
AB40-ASA1,708,2020 e. In this subdivision, "pupil" means an elementary pupil or secondary pupil.
AB40-ASA1,708,2221 f. In this subdivision, "secondary pupil" means an individual who is enrolled
22in grades 9 to 12 at an eligible institution.
AB40-ASA1,708,2423 g. In this subdivision, "tuition" means any amount paid by a claimant, in the
24year to which the claim relates, for a pupil's tuition to attend an eligible institution.
AB40-ASA1,709,3
1h. For each elementary pupil, in each year to which the claim relates, the
2maximum amount of tuition expenses which a claimant may subtract under this
3subdivision in a taxable year is $4,000.
AB40-ASA1,709,64 i. For each secondary pupil, in each year to which the claim relates, the
5maximum amount of tuition expenses which a claimant may subtract under this
6subdivision in a taxable year is $10,000.
AB40-ASA1,709,97 j. If an individual is an elementary pupil and a secondary pupil in the same
8taxable year, the claimant may claim the subtraction under this subdivision for only
9one grade for that pupil for that taxable year.
AB40-ASA1,1304gm 10Section 1304gm. 71.05 (6) (b) 50. of the statutes is created to read:
AB40-ASA1,709,1611 71.05 (6) (b) 50. Starting with the first taxable year beginning after December
1231, 2013, and for each of the next 4 taxable years, 20 percent of the amount
13determined by subtracting the combined federal adjusted basis of all depreciated or
14amortized assets as of the last day of the taxable year beginning in 2013 that are also
15being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted
16basis of those assets on the same day.
AB40-ASA1,1304h 17Section 1304h. 71.05 (8) (a) of the statutes is amended to read:
AB40-ASA1,709,2418 71.05 (8) (a) The carry back of losses to reduce income of prior years shall not
19may be permitted for 2 taxable years. There shall be added any amount deducted
20as a federal net operating loss carry-back or carry-over and there shall be subtracted
21for the first taxable year for which the subtraction may be made any Wisconsin net
22operating loss carry-back or carry-forward allowable under par. (b) in an amount not
23in excess of the Wisconsin taxable income computed before the deduction of the
24Wisconsin net operating loss carry-back or carry-forward.
AB40-ASA1,1304he 25Section 1304he. 71.05 (8) (b) of the statutes is amended to read:
AB40-ASA1,710,15
171.05 (8) (b) A Wisconsin net operating loss may be carried back against
2Wisconsin taxable income of the previous 2 years and then
carried forward against
3Wisconsin taxable incomes of the next 15 20 taxable years, if the taxpayer was
4subject to taxation under this chapter in the taxable year in which the loss was
5sustained, to the extent not offset against other income of the year of loss and to the
6extent not offset against Wisconsin modified taxable income of the 2 years preceding
7the loss and
of any year between the loss year and the taxable year for which the loss
8carry-forward is claimed. In this paragraph, "Wisconsin modified taxable income"
9means Wisconsin taxable income with the following exceptions: a net operating loss
10deduction or offset for the loss year or any taxable year before or thereafter is not
11allowed, the deduction for long-term capital gains under subs. (6) (b) 9. and 9m. and
12(25) is not allowed, the amount deductible for losses from sales or exchanges of
13capital assets may not exceed the amount includable in income for gains from sales
14or exchanges of capital assets and "Wisconsin modified taxable income" may not be
15less than zero.
AB40-ASA1,1304i 16Section 1304i. 71.05 (16) of the statutes is amended to read:
AB40-ASA1,710,2117 71.05 (16) Depreciation continuation. Property For taxable years beginning
18before January 1, 2014, property
that, under s. 71.02 (2) (d) 12., 1985 stats., is
19required to be depreciated for taxable year 1986 under the internal revenue code as
20amended to December 31, 1980, shall continue to be depreciated under the internal
21revenue code as amended to December 31, 1980.
AB40-ASA1,1304j 22Section 1304j. 71.05 (17) of the statutes is amended to read:
AB40-ASA1,711,523 71.05 (17) Difference in basis. With For taxable years beginning before
24January 1, 2014, with
respect to depreciable property that, under s. 71.02 (2) (d) 12.,
251985 stats., is required to be depreciated for taxable year 1986 under the internal

1revenue code as amended to December 31, 1980, and that was disposed of in taxable
2year 1986 and thereafter, any difference between the adjusted basis for federal
3income tax purposes and the adjusted basis under this chapter shall be taken into
4account in determining net income or loss in the year or years that the gain or loss
5is reportable under this chapter.
AB40-ASA1,1304m 6Section 1304m. 71.05 (18) of the statutes is amended to read:
AB40-ASA1,711,167 71.05 (18) Carry-over basis precluded. With For taxable years beginning
8before January 1, 2014, with
respect to property that, under s. 71.02 (2) (d) 12., 1985
9stats., is required to be depreciated for taxable year 1986 under the internal revenue
10code as amended to December 31, 1980, and that was acquired in a transaction
11occurring in taxable year 1986 and thereafter in which the adjusted basis of the
12property in the hands of the transferee is the same as the adjusted basis of the
13property in the hands of the transferor, the Wisconsin adjusted basis of that property
14on the date of transfer is the adjusted basis allowable under the depreciation
15provisions of the internal revenue code as defined for Wisconsin purposes for the
16property in the hands of the transferor.
AB40-ASA1,1305 17Section 1305. 71.05 (24) (a) 4. of the statutes is amended to read:
AB40-ASA1,711,1918 71.05 (24) (a) 4. "Qualified new business venture" means a business certified
19under s. 238.20, 2011 stats., or s. 560.2085, 2009 stats.
AB40-ASA1,1306 20Section 1306. 71.05 (24) (b) (intro.) of the statutes is amended to read:
AB40-ASA1,711,2421 71.05 (24) (b) (intro.) For taxable years beginning after December 31, 2010, and
22before January 1, 2014,
a claimant may subtract from federal adjusted gross income
23any amount, up to $10,000,000, of a long-term capital gain if the claimant does all
24of the following:
AB40-ASA1,1307 25Section 1307. 71.05 (25) (title) of the statutes is amended to read:
AB40-ASA1,712,2
171.05 (25) (title) Capital gains exclusion; Wisconsin-source assets qualified
2Wisconsin business
.
AB40-ASA1,1308 3Section 1308. 71.05 (25) (a) 2. of the statutes is amended to read:
AB40-ASA1,712,124 71.05 (25) (a) 2. "Qualifying gain" means the a long-term capital gain under
5the Internal Revenue Code
realized from the sale of any asset which is a Wisconsin
6capital asset in the year it is purchased by the claimant and for at least 2 of the
7subsequent 4 years; that is purchased
an investment made after December 31, 2010;
8that is
, and held for at least 5 uninterrupted years ; and that is treated as a long-term
9gain under the Internal Revenue Code
in a business that for the year of investment
10and at least 2 of the 4 subsequent years was a qualified Wisconsin business
; except
11that a qualifying gain may not include any amount for which the claimant claimed
12a subtraction under sub. (24) (b) or any gain described under sub. (26) (b) 1.
AB40-ASA1,1309 13Section 1309. 71.05 (25) (a) 3. of the statutes is renumbered 71.05 (25) (a) 1s.
14and amended to read:
AB40-ASA1,712,1715 71.05 (25) (a) 1s. "Qualified Wisconsin business" means a business certified by
16the Wisconsin Economic Development Corporation under s. 238.145, 2011 stats., or
17registered with the department under s. 73.03 (69)
.
AB40-ASA1,1310 18Section 1310. 71.05 (25) (a) 4. of the statutes is repealed.
AB40-ASA1,1311 19Section 1311. 71.05 (25) (b) (intro.) of the statutes is renumbered 71.05 (25)
20(b) and amended to read:
AB40-ASA1,713,221 71.05 (25) (b) For taxable years beginning after December 31, 2015, for a
22Wisconsin capital asset that is purchased
an investment in a qualified Wisconsin
23business made
after December 31, 2010, and held for at least 5 uninterrupted years,
24a claimant may subtract from federal adjusted gross income the lesser of one of the

1following amounts
amount of the claimant's qualifying gain in the year to which the
2claim relates
, to the extent that it is not subtracted under sub. (6) (b) 9. or 9m.:
AB40-ASA1,1312 3Section 1312. 71.05 (25) (b) 1. of the statutes is repealed.
AB40-ASA1,1313 4Section 1313. 71.05 (25) (b) 2. of the statutes is repealed.
AB40-ASA1,1314 5Section 1314. 71.05 (26) (title) of the statutes is amended to read:
AB40-ASA1,713,76 71.05 (26) (title) Income tax deferral; long-term Wisconsin capital assets
7qualified Wisconsin business.
AB40-ASA1,1315 8Section 1315. 71.05 (26) (a) 4. of the statutes is amended to read:
AB40-ASA1,713,119 71.05 (26) (a) 4. "Qualified Wisconsin business" means a business certified by
10the Wisconsin Economic Development Corporation under s. 238.146, 2011 stats., or
11registered with the department under s. 73.03 (69)
.
AB40-ASA1,1316 12Section 1316. 71.05 (26) (b) (intro.) of the statutes is amended to read:
AB40-ASA1,713,1513 71.05 (26) (b) (intro.) For taxable years beginning after December 31, 2010, and
14before January 1, 2014,
a claimant may subtract from federal adjusted gross income
15any amount of a long-term capital gain if the claimant does all of the following:
AB40-ASA1,1317 16Section 1317. 71.05 (26) (bm) of the statutes is created to read:
AB40-ASA1,713,1917 71.05 (26) (bm) For taxable years beginning after December 31, 2013, a
18claimant may subtract from federal adjusted gross income any amount of a
19long-term capital gain if the claimant does all of the following:
AB40-ASA1,713,2120 1. Within 180 days after the sale of the asset that generated the gain, invests
21all of the gain in a qualified Wisconsin business.
AB40-ASA1,714,222 2. After making the investment as described under subd. 1., notifies the
23department, on a form prepared by the department, that the claimant will not
24declare the gain on the claimant's income tax return because the claimant has
25reinvested the capital gain as described under subd. 1. The form shall be sent to the

1department along with the claimant's income tax return for the year to which the
2claim relates.
AB40-ASA1,1318 3Section 1318. 71.05 (26) (c) of the statutes is amended to read:
AB40-ASA1,714,84 71.05 (26) (c) The basis of the investment described in par. (b) 2. shall be
5calculated by subtracting the gain described in par. (b) 1. from the amount of the
6investment described in par. (b) 2. The basis of the investment described in par. (bm)
71. shall be calculated by subtracting the gain described in par. (bm) 1. from the
8amount of the investment described in par. (bm) 1.
AB40-ASA1,1319 9Section 1319. 71.05 (26) (d) of the statutes is amended to read:
AB40-ASA1,714,1210 71.05 (26) (d) If a claimant defers the payment of income taxes on a capital gain
11under this subsection, the claimant may not use the gain described under par. (b) 1.
12to net capital gains and losses, as described under sub. (10) (c).
AB40-ASA1,1320 13Section 1320. 71.05 (26) (f) of the statutes is amended to read:
AB40-ASA1,714,1614 71.05 (26) (f) If a claimant claims the a subtraction for a capital gain under this
15subsection
par. (b) or (bm), the gain described under par. (b) 1. may not be used as
16a qualifying gain under sub. (25).
AB40-ASA1,1321 17Section 1321. 71.06 (1p) (intro.) of the statutes is amended to read:
AB40-ASA1,714,2318 71.06 (1p) Fiduciaries, single individuals and heads of households; after 2000
192001 to 2012. (intro.) The tax to be assessed, levied and collected upon the taxable
20incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or
21reserve funds, and single individuals and heads of households shall be computed at
22the following rates for taxable years beginning after December 31, 2000, and before
23January 1, 2013
:
AB40-ASA1,1322 24Section 1322. 71.06 (1q) of the statutes is created to read:
AB40-ASA1,715,5
171.06 (1q) Fiduciaries, single individuals, and heads of households; after
22012.
(intro.) The tax to be assessed, levied, and collected upon the taxable incomes
3of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve
4funds, and single individuals and heads of households shall be computed at the
5following rates for taxable years beginning after December 31, 2012:
AB40-ASA1,715,66 (a) On all taxable income from $0 to $7,500, 4.40 percent.
AB40-ASA1,715,87 (b) On all taxable income exceeding $7,500 but not exceeding $15,000, 5.84
8percent.
AB40-ASA1,715,109 (c) On all taxable income exceeding $15,000 but not exceeding $225,000, 6.27
10percent.
AB40-ASA1,715,1111 (d) On all taxable income exceeding $225,000, 7.65 percent.
AB40-ASA1,1323 12Section 1323. 71.06 (2) (g) (intro.) of the statutes is amended to read:
AB40-ASA1,715,1413 71.06 (2) (g) (intro.) For joint returns, for taxable years beginning after
14December 31, 2000, and before January 1, 2013:
AB40-ASA1,1324 15Section 1324. 71.06 (2) (h) (intro.) of the statutes is amended to read:
AB40-ASA1,715,1716 71.06 (2) (h) (intro.) For married persons filing separately, for taxable years
17beginning after December 31, 2000, and before January 1, 2013:
AB40-ASA1,1325 18Section 1325. 71.06 (2) (i) of the statutes is created to read:
AB40-ASA1,715,2019 71.06 (2) (i) For joint returns, for taxable years beginning after
20December 31, 2012:
AB40-ASA1,715,2121 1. On all taxable income from $0 to $10,000, 4.40 percent.
AB40-ASA1,715,2322 2. On all taxable income exceeding $10,000 but not exceeding $20,000, 5.84
23percent.
AB40-ASA1,715,2524 3. On all taxable income exceeding $20,000 but not exceeding $300,000, 6.27
25percent.
AB40-ASA1,716,1
14. On all taxable income exceeding $300,000, 7.65 percent.
AB40-ASA1,1326 2Section 1326. 71.06 (2) (j) of the statutes is created to read:
AB40-ASA1,716,43 71.06 (2) (j) For married persons filing separately, for taxable years beginning
4after December 31, 2012:
AB40-ASA1,716,55 1. On all taxable income from $0 to $5,000, 4.40 percent.
AB40-ASA1,716,76 2. On all taxable income exceeding $5,000 but not exceeding $10,000, 5.84
7percent.
AB40-ASA1,716,98 3. On all taxable income exceeding $10,000 but not exceeding $150,000, 6.27
9percent.
AB40-ASA1,716,1010 4. On all taxable income exceeding $150,000, 7.65 percent.
AB40-ASA1,1327 11Section 1327. 71.06 (2e) (a) of the statutes is amended to read:
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