Amendment ASA1-AB762

LRBs0337/1

JK:amn

2021 - 2022 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO ASSEMBLY BILL 762

February 9, 2022 - Offered by Representative Novak.

AB762-ASA1,1,4 An Act to amend 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g) and 71.45 (2) (a) 10.; and to create 71.07 (4t), 71.10 (4) (ct), 71.28 (4t), 71.30 (3) (ct), 71.47 (4t) and 71.49 (1) (ct) of the statutes; relating to: creating a tax credit for local media advertising.

Analysis by the Legislative Reference Bureau

This bill creates an income and franchise tax credit for businesses that purchase advertising in local media outlets. The credit equals 50 percent of the advertising expenditures, limited to a maximum credit of $5,000. The credit may be claimed only by businesses with fewer than 100 full-time employees and less than $10,000,000 in gross receipts. The bill defines “local media outlet” to mean a newspaper in Wisconsin, a broadcast radio or television station that is licensed by the Federal Communications Commission to serve a local community in Wisconsin, or a Wisconsin-based Internet site that is meant to inform users of news and events in a local community in Wisconsin. The bill provides that the credit may be claimed only for taxable years beginning after December 31, 2021, and before January 1, 2027.

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

AB762-ASA1,1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB762-ASA1,2,7 71.05 (6) (a) 15. Except as provided under s. 71.07 (3p) (c) 5., the amount of the credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (4t), (5e), (5i), (5j), (5k), (5r), (5rm), (6n), and (10) 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 (1k) (g).

AB762-ASA1,2 Section 2 . 71.07 (4t) of the statutes is created to read:

AB762-ASA1,2,10 71.07 (4t) Local media advertising tax credit. (a) Definitions. In this subsection:

AB762-ASA1,2,17 1. “Claimant” means an individual who, in the taxable year to which the claim under this subsection relates, operates a business that does not have 100 or more full-time employees at any one time during the taxable year and has less than $10,000,000 in gross receipts. For purposes of this subdivision, an employee of a professional employer organization, as defined in s. 202.21 (5), or a professional employer group, as defined in s. 202.21 (4), who is performing services for a client is considered an employee solely of the client.

AB762-ASA1,2,18 2. “Full-time employee” has the meaning given in s. 238.399 (1) (am).

AB762-ASA1,2,19 3. “Local media outlet” means any of the following:

AB762-ASA1,2,20 a. A newspaper in this state.

AB762-ASA1,3,2 b. A broadcast radio or television station that is licensed by the federal communications commission to serve a local community in this state.

AB762-ASA1,3,4 c. An Internet site based in this state that is meant to inform users of news and events in a local community in this state.

AB762-ASA1,3,9 (b) Filing claims. For taxable years beginning after December 31, 2021, and before January 1, 2027, a claimant may claim as a credit against the taxes imposed under s. 71.02, up to the amount of the tax, an amount equal to 50 percent of the expenditures paid or incurred in the taxable year by the claimant in the ordinary course of a trade or business for advertising in a local media outlet.

AB762-ASA1,3,11 (c) Limitations. 1. The maximum amount of expenditures that may be taken into account under par. (b) in a taxable year is $10,000.

AB762-ASA1,3,18 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. The partners, members, and shareholders may claim the credit in proportion to their ownership interests.

AB762-ASA1,3,21 3. No credit may be claimed under this subsection unless the claimant makes the adjustment under s. 71.05 (6) (a) 30. in the taxable year to which the claim relates.

AB762-ASA1,3,23 (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.

AB762-ASA1,3 Section 3 . 71.10 (4) (ct) of the statutes is created to read:

AB762-ASA1,3,25 71.10 (4) (ct) Local media advertising tax credit under s. 71.07 (4t).

AB762-ASA1,4 Section 4. 71.21 (4) (a) of the statutes is amended to read:

AB762-ASA1,4,5 71.21 (4) (a) The amount of the credits computed by a partnership under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (4t), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10) and passed through to partners shall be added to the partnership's income.

AB762-ASA1,5 Section 5. 71.26 (2) (a) 4. of the statutes is amended to read:

AB762-ASA1,4,12 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm), (1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (4t), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (9s), and (10) 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 (1k) (g).

AB762-ASA1,6 Section 6 . 71.28 (4t) of the statutes is created to read:

AB762-ASA1,4,15 71.28 (4t) Local media advertising tax credit. (a) Definitions. In this subsection:

AB762-ASA1,4,24 1. “Claimant” means a corporation that, in the taxable year to which the claim under this subsection relates, does not have 100 or more full-time employees and has less than $10,000,000 in gross receipts. For purposes of this subdivision, an employee of a professional employer organization, as defined in s. 202.21 (5), or a professional employer group, as defined in s. 202.21 (4), who is performing services for a client is considered an employee solely of the client. For purposes of this subdivision and for claiming the credit under this subsection, corporations filing a combined return must qualify independently of other members in the combined group.

AB762-ASA1,4,25 2. “Full-time employee” has the meaning given in s. 238.399 (1) (am).

AB762-ASA1,5,1 3. “Local media outlet” means any of the following:

AB762-ASA1,5,2 a. A newspaper in this state.

AB762-ASA1,5,4 b. A broadcast radio or television station that is licensed by the federal communications commission to serve a local community in this state.

AB762-ASA1,5,6 c. An Internet site based in this state that is meant to inform users of news and events in a local community in this state.

AB762-ASA1,5,11 (b) Filing claims. For taxable years beginning after December 31, 2021, and before January 1, 2027, a claimant may claim as a credit against the taxes imposed under s. 71.23, up to the amount of the tax, an amount equal to 50 percent of the expenditures paid or incurred in the taxable year by the claimant in the ordinary course of a trade or business for advertising in a local media outlet.

AB762-ASA1,5,13 (c) Limitations. 1. The maximum amount of expenditures that may be taken into account under par. (b) in a taxable year is $10,000.

AB762-ASA1,5,20 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. The partners, members, and shareholders may claim the credit in proportion to their ownership interests.

AB762-ASA1,5,22 3. No credit may be claimed under this subsection unless the claimant makes the adjustment under s. 71.26 (3) (e) 5. in the taxable year to which the claim relates.

AB762-ASA1,5,24 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB762-ASA1,7 Section 7 . 71.30 (3) (ct) of the statutes is created to read:

AB762-ASA1,6,1 71.30 (3) (ct) Local media advertising tax credit under s. 71.28 (4t).

AB762-ASA1,8 Section 8. 71.34 (1k) (g) of the statutes is amended to read:

AB762-ASA1,6,6 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (4), (4t), (5), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10) and passed through to shareholders.

AB762-ASA1,9 Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:

AB762-ASA1,6,14 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (4t), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (9s), and (10) 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 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).