SB482: Bill Text

LRB-4692/3

JK:jlg:kjf

1999 - 2000 LEGISLATURE

1999 Senate BILL 482

March 16, 2000 - Introduced by Senators Shibilski, Moore and Darling, cosponsored by Representative Olsen. Referred to Committee on Economic Development, Housing and Government Operations.

SB482,1,4 An Act to amend 71.05 (6) (a) 15., 71.26 (2) (a), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (5d), 71.10 (4) (cp), 71.28 (5d), 71.30 (3) (dm), 71.47 (5d) and 71.49 (1) (dm) of the statutes; relating to: an income tax and franchise tax credit for expenses paid on behalf of an undergraduate student.

Analysis by the Legislative Reference Bureau

This bill creates an income tax and franchise tax credit for a business that pays a student's school related expenses, including room and board, books and tuition, if the student is either a full-time undergraduate student enrolled in the University of Wisconsin System and is eligible for a Wisconsin higher education grant or is a full-time undergraduate student enrolled in a private college or university in this state and is eligible for a talent incentive grant for needy students. The amount of the credit is $1,000 for every $3,000 of the student's expenses that the business pays in the taxable year. The business may claim credits for expenses that are paid for no more than ten semesters that the student is enrolled as an undergraduate.

Partnerships, limited liability companies and tax-option corporations compute the credit but pass it on to the partners, members and shareholders in proportion to their ownership interests. If the credit exceeds the business's tax liability, the state will not issue a refund check, but the credit may be carried forward to later taxable years.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

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

SB482, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

SB482,2,6 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx) and, (3s) and (5d) 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).

SB482, s. 2 Section 2. 71.07 (5d) of the statutes is created to read:

SB482,2,8 71.07 (5d) Student sponsorship credit. (a) In this subsection:

SB482,2,11 1. "Claimant" means a sole proprietor, a partner, a member of a limited liability company or a shareholder of a tax-option corporation who files a claim under this subsection.

SB482,2,13 2. "Qualified expenses" means expenses related to attending school including room and board, books and tuition.

SB482,2,14 3. "Qualified student" means any of the following:

SB482,2,17 a. A student who is a full-time undergraduate student enrolled in the University of Wisconsin System and who is eligible for a Wisconsin higher education grant under s. 39.435 for at least 2 semesters that the student is enrolled.

SB482,2,21 b. A student who is a full-time undergraduate student enrolled in a regionally accredited 4-year private college or university in this state and who is eligible for a talent incentive grant under s. 39.435 (2) for at least 2 semesters that the student is enrolled.

SB482,3,4 (b) Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02 an amount equal to $1,000 for every $3,000 of qualified expenses that the claimant pays on behalf of a qualified student in a taxable year.

SB482,3,7 (c) A claimant may claim credits under par. (b) for qualified expenses that are paid for no more than 10 semesters that the qualified student is enrolled as an undergraduate.

SB482,3,10 (d) A claimant may not claim the credit under par. (b) for any tuition amounts that the claimant excluded under s. 71.05 (6) (b) 28. or under section 127 of the Internal Revenue Code.

SB482,3,12 (e) The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit under s. 71.28 (4), apply to the credit under this subsection.

SB482,3,20 (f) 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 qualified expenses under par. (b) 1. 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 interest.

SB482,3,22 (g) Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB482, s. 3 Section 3. 71.10 (4) (cp) of the statutes is created to read:

SB482,3,24 71.10 (4) (cp) The student sponsorship credit under s. 71.07 (5d).

SB482, s. 4 Section 4. 71.26 (2) (a) of the statutes is amended to read:

SB482,4,15 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) and (3) to (5) plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds) and , (1dx) and (5d) 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).

SB482, s. 5 Section 5. 71.28 (5d) of the statutes is created to read:

SB482,4,17 71.28 (5d) Student sponsorship credit. (a) In this subsection:

SB482,4,18 1. "Claimant" means a corporation that files a claim under this subsection.

SB482,4,20 2. "Qualified expenses" means expenses related to attending school including room and board, books and tuition.

SB482,4,21 3. "Qualified student" means any of the following:

SB482,4,24 a. A student who is a full-time undergraduate student enrolled in the University of Wisconsin System and who is eligible for a Wisconsin higher education grant under s. 39.435 for at least 2 semesters that the student is enrolled.

SB482,5,4 b. A student who is a full-time undergraduate student enrolled in a regionally accredited 4-year private college or university in this state and who is eligible for a talent incentive grant under s. 39.435 (2) for at least 2 semesters that the student is enrolled.

SB482,5,8 (b) Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23 an amount equal to $1,000 for every $3,000 of qualified expenses that the claimant pays on behalf of a qualified student in a taxable year.

SB482,5,11 (c) A claimant may claim credits under par. (b) for qualified expenses that are paid for no more than 10 semesters that the qualified student is enrolled as an undergraduate.

SB482,5,14 (d) A claimant may not claim the credit under par. (b) for any tuition amounts that the claimant excluded under s. 71.05 (6) (b) 28. or under section 127 of the Internal Revenue Code.

SB482,5,16 (e) The carry-over provisions of sub. (4) (e) and (f), as they apply to the credit under sub. (4), apply to the credit under this subsection.

SB482,5,24 (f) 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 qualified expenses under par. (b) 1. 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 interest.

SB482,6,2 (g) Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB482, s. 6 Section 6. 71.30 (3) (dm) of the statutes is created to read:

SB482,6,4 71.30 (3) (dm) The student sponsorship credit under s. 71.28 (5d).

SB482, s. 7 Section 7. 71.45 (2) (a) 10. of the statutes is amended to read:

SB482,6,11 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx) and (5d) 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), (4) and (5).

SB482, s. 8 Section 8. 71.47 (5d) of the statutes is created to read:

SB482,6,13 71.47 (5d) Student sponsorship credit. (a) In this subsection:

SB482,6,14 1. "Claimant" means a corporation that files a claim under this subsection.