AB118: Bill Text

LRB-0744/1

JK:lmk:rs

2005 - 2006 LEGISLATURE

2005 Assembly BILL 118

February 22, 2005 - Introduced by Representatives Loeffelholz, Gronemus, Ainsworth, Kerkman, Van Roy, Albers, Fields, Freese, Jensen, Townsend, Ott, Vos, Jeskewitz, Gunderson, Pettis and Davis, cosponsored by Senators Grothman, Roessler and Kanavas. Referred to Committee on Workforce Development.

AB118,1,4 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (5e), 71.10 (4) (cp), 71.28 (5e), 71.30 (3) (dm), 71.47 (5e) and 71.49 (1) (dm) of the statutes; relating to: an income tax and franchise tax credit for training apprentices.

Analysis by the Legislative Reference Bureau

This bill creates an income tax and franchise tax credit for an employer that pays wages to an apprentice who is participating in a two-year to five-year apprenticeship program in which the apprentice is receiving instruction leading to qualification as a skilled journeyman in any of the five industrial manufacturing trades; any of the five private sector service occupations; or any of the five construction trades; with the most projected job openings for new entrants, as determined by the Department of Workforce Development. The amount of the credit is 5 percent of the wages that are paid to an apprentice in a taxable year, but cannot exceed $1,400, except that, in the taxable year in which the apprentice completes the apprenticeship program, the amount of the credit is 8 percent of the wages that are paid to an apprentice, but cannot exceed $3,000. Generally, no employer may claim the credit for taxable years beginning after December 31, 2008, if the number of employers training apprentices does not increase by more than 40 percent from January 1, 2006, to December 31, 2008.

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:

AB118, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB118,2,6 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3n), (3s), (3t), (5b), and (5d), and (5e) 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).

AB118, s. 2 Section 2. 71.07 (5e) of the statutes is created to read:

AB118,2,9 71.07 (5e) Industrial, service, and skilled trades apprenticeship credit. (a) In this subsection:

AB118,2,17 1. "Apprentice" means a person who participates in a 2-year to 5-year apprenticeship program, as determined and approved by the department, in which the person receives instruction leading to qualification as a skilled journeyman in an industrial manufacturing trade, construction trade, or private sector service occupation, if the apprenticeship program provides instruction related to any of the 5 manufacturing trades; any of the 5 construction trades; or any of the 5 private sector service occupations; with the most projected job openings for new entrants, as determined by the department.

AB118,2,19 2. "Claimant" means a person who files a claim under this subsection and who is a trades trainer, as determined and approved by the department.

AB118,2,20 3. "Department" means the department of workforce development.

AB118,3,9 (b) Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2005, a claimant may claim as a credit against the taxes imposed under s. 71.02 an amount that is equal to 5 percent of the wages that the claimant paid to an apprentice in the taxable year, but the amount of the credit may not exceed $1,400 for each apprentice, except that a claimant may claim as a credit against the taxes imposed under s. 71.02 an amount that is equal to 8 percent of the wages that the claimant paid to an apprentice in the taxable year in which the apprentice completes an apprenticeship program, but the amount of the credit may not exceed $3,000 for each apprentice.

AB118,3,12 (bm) With respect to an apprentice who is employed in a full-time job as an apprentice, no person may claim a credit under this subsection and sub. (2dx) for the same job.

AB118,3,23 (c) This subsection does not apply to taxable years that begin after December 31, 2008, if the number of employers training apprentices in department-approved programs does not increase by more than 40 percent from January 1, 2006, to December 31, 2008, as determined by the department, except that a claimant who has claimed a credit for an apprentice's wages in any taxable year beginning before January 1, 2009, may continue to claim a credit for the apprentice's wages in succeeding taxable years, until the apprentice completes the apprenticeship program. As soon as practicable after December 31, 2008, the department shall certify to the department of revenue the number of employers training apprentices in approved programs on January 1, 2006, and the number of employers training apprentices in approved programs on December 31, 2008.

AB118,3,25 (d) 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.

AB118,4,8 (e) 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 wages 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.

AB118,4,10 (f) 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.

AB118, s. 3 Section 3. 71.10 (4) (cp) of the statutes is created to read:

AB118,4,13 71.10 (4) (cp) Industrial, service, and skilled trades apprenticeship credit under s. 71.07 (5e).

AB118, s. 4 Section 4. 71.21 (4) of the statutes is amended to read:

AB118,4,17 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), and (5b), and (5e) and passed through to partners shall be added to the partnership's income.

AB118, s. 5 Section 5. 71.26 (2) (a) of the statutes is amended to read:

AB118,5,11 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), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c) 7., the amount of the credit under s. 71.28 (3) that the taxpayer added to income under this paragraph at the time that the taxpayer first claimed the credit plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3g), (3n), (3t), and (5b), and (5e) 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).

AB118, s. 6 Section 6. 71.28 (5e) of the statutes is created to read:

AB118,5,14 71.28 (5e) Industrial, service, and skilled trades apprenticeship credit. (a) In this subsection:

AB118,5,22 1. "Apprentice" means a person who participates in a 2-year to 5-year apprenticeship program, as determined and approved by the department, in which the person receives instruction leading to qualification as a skilled journeyman in an industrial manufacturing trade, construction trade, or private sector service occupation, if the apprenticeship program provides instruction related to any of the 5 manufacturing trades; any of the 5 construction trades; or any of the 5 private sector service occupations; with the most projected job openings for new entrants, as determined by the department.

AB118,5,24 2. "Claimant" means a person who files a claim under this subsection and who is a trades trainer, as determined and approved by the department.

AB118,5,25 3. "Department" means the department of workforce development.

AB118,6,9 (b) Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2005, a claimant may claim as a credit against the taxes imposed under s. 71.23 an amount that is equal to 5 percent of the wages that the claimant paid to an apprentice in the taxable year, but the amount of the credit may not exceed $1,400 for each apprentice, except that a claimant may claim as a credit against the taxes imposed under s. 71.23 an amount that is equal to 8 percent of the wages that the claimant paid to an apprentice in the taxable year in which the apprentice completes an apprenticeship program, but the amount of the credit may not exceed $3,000 for each apprentice.

AB118,6,12 (bm) With respect to an apprentice who is employed in a full-time job as an apprentice, no person may claim a credit under this subsection and sub. (1dx) for the same job.

AB118,6,23 (c) This subsection does not apply to taxable years that begin after December 31, 2008, if the number of employers training apprentices in department-approved programs does not increase by more than 40 percent from January 1, 2006, to December 31, 2008, as determined by the department, except that a claimant who has claimed a credit for an apprentice's wages in any taxable year beginning before January 1, 2009, may continue to claim a credit for the apprentice's wages in succeeding taxable years, until the apprentice completes the apprenticeship program. As soon as practicable after December 31, 2008, the department shall certify to the department of revenue the number of employers training apprentices in approved programs on January 1, 2006, and the number of employers training apprentices in approved programs on December 31, 2008.

AB118,6,25 (d) 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.

AB118,7,8 (e) 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 wages 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.

AB118,7,10 (f) Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB118, s. 7 Section 7. 71.30 (3) (dm) of the statutes is created to read:

AB118,7,13 71.30 (3) (dm) The industrial, service, and skilled trades apprenticeship credit under s. 71.28 (5e).

AB118, s. 8 Section 8. 71.34 (1) (g) of the statutes is amended to read:

AB118,7,17 71.34 (1) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), (3g), (3n), (3t), and (5b), and (5e) and passed through to shareholders.

AB118, s. 9 Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:

AB118,7,24 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (3n), and (5b), and (5e) 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), (3t), (4), and (5).

AB118, s. 10 Section 10. 71.47 (5e) of the statutes is created to read:

AB118,8,2 71.47 (5e) Industrial, service, and skilled trades apprenticeship credit. (a) In this subsection:

AB118,8,10 1. "Apprentice" means a person who participates in a 2-year to 5-year apprenticeship program, as determined and approved by the department, in which the person receives instruction leading to qualification as a skilled journeyman in any industrial manufacturing trade, construction trade, or private sector service occupation, if the apprenticeship program provides instruction related to any of the 5 manufacturing trades; any of the 5 construction trades; or any of the 5 private sector service occupations; with the most projected job openings for new entrants, as determined by the department.

AB118,8,12 2. "Claimant" means a person who files a claim under this subsection and who is a trades trainer, as determined and approved by the department.