AB419: Bill Text

LRB-2457/2

JK:jld/kjf/wlj:rs

2005 - 2006 LEGISLATURE

2005 Assembly BILL 419

May 12, 2005 - Introduced by Representatives Davis, Towns, Sheridan, Hundertmark, Vrakas, Freese, Pridemore, Gronemus, Montgomery, Musser, Lothian, Fields, Friske, Kestell, Hahn, Gunderson, Moulton, Owens, Petrowski, Vos, Nass, Loeffelholz, Berceau and Lamb, cosponsored by Senators Kedzie, Kanavas, Robson, Darling, Olsen, Stepp and Erpenbach. Referred to Joint Committee on Finance.

AB419,1,10 An Act to repeal 71.07 (2di) (b) 1., 71.07 (2dL) (c) 1., 71.28 (1di) (b) 1., 71.28 (1dL) (c) 1., 71.47 (1di) (b) 1. and 71.47 (1dL) (c) 1.; to renumber 71.07 (2dL) (c) 2., 71.28 (1dL) (c) 2. and 71.47 (1dL) (c) 2.; and to amend 20.835 (2) (cL), 71.07 (2di) (b) 3., 71.07 (2dL) (d), 71.07 (2dL) (e), 71.07 (2dm) (hm), 71.07 (2dm) (i), 71.07 (2dx) (b) (intro.), 71.07 (2dx) (be), 71.28 (1di) (b) 3., 71.28 (1dL) (d), 71.28 (1dL) (e), 71.28 (1dm) (hm), 71.28 (1dm) (i), 71.28 (1dx) (b) (intro.), 71.28 (1dx) (be), 71.47 (1di) (b) 3., 71.47 (1dL) (d), 71.47 (1dL) (e), 71.47 (1dm) (hm), 71.47 (1dm) (i), 71.47 (1dx) (b) (intro.) and 71.47 (1dx) (be) of the statutes; relating to: claiming the development zones capital investment tax credit, development zones credit, development opportunity zones credit, or technology zones credit.

Analysis by the Legislative Reference Bureau

Under current law, a taxpayer may claim income and franchise tax credits based, generally, on the taxpayer's business activities in a location designated by the Department of Commerce as a development zone, opportunity zone, enterprise zone, or agricultural development zone. The taxpayer may claim the credits against the taxes imposed on the income derived from the taxpayer's business activities in the development zone, opportunity zone, enterprise zone, or agricultural development zone. Under this bill, generally, the taxpayer may claim the credits against the taxes imposed on all of the taxpayer's Wisconsin income.

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:

AB419, s. 1 Section 1. 20.835 (2) (cL) of the statutes is amended to read:

AB419,2,3 20.835 (2) (cL) Development zones location credit. A sum sufficient to make the payments under ss. 71.07 (2dL) (c) 2., 71.28 (1dL) (c) 2., and 71.47 (1dL) (c) 2.

AB419, s. 2 Section 2. 71.07 (2di) (b) 1. of the statutes is repealed.

AB419, s. 3 Section 3. 71.07 (2di) (b) 3. of the statutes is amended to read:

AB419,3,3 71.07 (2di) (b) 3. Partnerships, limited liability companies and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or company shall compute the amount of the credit that may be claimed by each of its shareholders, partners or members and shall provide that information to each of its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone; except that partners, members, and shareholders in a development zone under s. 560.795 (1) (e) may offset the credit against the amount of the tax attributable to their income from all of the partnership's, company's, or corporation's business operations; and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.

AB419, s. 4 Section 4. 71.07 (2dL) (c) 1. of the statutes is repealed.

AB419, s. 5 Section 5. 71.07 (2dL) (c) 2. of the statutes is renumbered 71.07 (2dL) (c).

AB419, s. 6 Section 6. 71.07 (2dL) (d) of the statutes is amended to read:

AB419,3,9 71.07 (2dL) (d) Except as provided in par. (c) 2., the carry-over provisions of s. 71.28 (4) (e) and (f) as they relate to the credit under s. 71.28 (4) relate to the credit under this subsection and apply as if the development zone continued to exist.

AB419, s. 7 Section 7. 71.07 (2dL) (e) of the statutes is amended to read:

AB419,3,23 71.07 (2dL) (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, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or limited liability company shall compute the amount of credit that may be claimed by each of its shareholders, partners or members and provide that information to its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.

AB419, s. 8 Section 8. 71.07 (2dm) (hm) of the statutes is amended to read:

AB419,4,8 71.07 (2dm) (hm) Credits claimed A claimant may claim the credit under this subsection, including any credits carried over, may be offset only against the amount of the tax otherwise due under this subchapter attributable to income from the business operations of the claimant in the development zone; except that a claimant in a development zone under s. 560.795 (1) (e) may offset credits, including any credits carried over, against the amount of the tax otherwise due under this subchapter attributable to all of the claimant's income and against the tax attributable to income from directly related business operations of the claimant.

AB419, s. 9 Section 9. 71.07 (2dm) (i) of the statutes is amended to read:

AB419,4,23 71.07 (2dm) (i) Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners, or members. The corporation, partnership, or limited liability company shall compute the amount of credit that may be claimed by each of its shareholders, partners, or members and provide that information to its shareholders, partners, or members. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit based on the partnership's, company's, or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's, or corporation's business operations in the development zone; except that partners, members, and shareholders in a development zone under s. 560.795 (1) (e) may offset the credit against the amount of the tax attributable to their income.

AB419, s. 10 Section 10. 71.07 (2dx) (b) (intro.) of the statutes is amended to read:

AB419,5,6 71.07 (2dx) (b) Credit. (intro.) Except as provided in pars. (be) and (bg) and in s. 73.03 (35), and subject to s. 560.785, for any taxable year for which the person is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3), 560.797 (4) or 560.798 (3), any person may claim as a credit against the taxes imposed on the person's income from the person's business activities in a development zone under this subchapter the following amounts:

AB419, s. 11 Section 11. 71.07 (2dx) (be) of the statutes is amended to read:

AB419,5,12 71.07 (2dx) (be) Offset. A claimant in a development zone under s. 560.795 (1) (e) may offset any credits claimed under this subsection, including any credits carried over, against the amount of the tax otherwise due under this subchapter attributable to all of the claimant's income and against the tax attributable to income from directly related business operations of the claimant.

AB419, s. 12 Section 12. 71.28 (1di) (b) 1. of the statutes is repealed.

AB419, s. 13 Section 13. 71.28 (1di) (b) 3. of the statutes is amended to read:

AB419,6,6 71.28 (1di) (b) 3. Partnerships, limited liability companies and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or limited liability company shall compute the amount of the credit that may be claimed by each of its shareholders, partners or members and shall provide that information to each of its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone; except that partners, members, and shareholders in a development zone under s. 560.795 (1) (e) may offset the credit against the amount of the tax attributable to their income from all of the partnership's, company's, or corporation's business operations; and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.

AB419, s. 14 Section 14. 71.28 (1dL) (c) 1. of the statutes is repealed.

AB419, s. 15 Section 15. 71.28 (1dL) (c) 2. of the statutes is renumbered 71.28 (1dL) (c).

AB419, s. 16 Section 16. 71.28 (1dL) (d) of the statutes is amended to read:

AB419,6,12 71.28 (1dL) (d) Except as provided in par. (c) 2., the carry-over provisions of sub. (4) (e) and (f) as they relate to the credit under that subsection relate to the credit under this subsection and apply as if the development zone continued to exist.

AB419, s. 17 Section 17. 71.28 (1dL) (e) of the statutes is amended to read:

AB419,7,2 71.28 (1dL) (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, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or limited liability company shall compute the amount of credit that may be claimed by each of its shareholders, partners or members and provide that information to its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.

AB419, s. 18 Section 18. 71.28 (1dm) (hm) of the statutes is amended to read:

AB419,7,11 71.28 (1dm) (hm) Credits claimed A claimant may claim the credit under this subsection, including any credits carried over, may be offset only against the amount of the tax otherwise due under this subchapter attributable to income from the business operations of the claimant in the development zone; except that a claimant in a development zone under s. 560.795 (1) (e) may offset credits, including any credits carried over, against the amount of the tax otherwise due under this subchapter attributable to all of the claimant's income and against the tax attributable to income from directly related business operations of the claimant.

AB419, s. 19 Section 19. 71.28 (1dm) (i) of the statutes is amended to read:

AB419,8,2 71.28 (1dm) (i) Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners, or members. The corporation, partnership, or limited liability company shall compute the amount of credit that may be claimed by each of its shareholders, partners, or members and provide that information to its shareholders, partners, or members. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit based on the partnership's, company's, or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's, or corporation's business operations in the development zone; except that partners, members, and shareholders in a development zone under s. 560.795 (1) (e) may offset the credit against the amount of the tax attributable to their income.

AB419, s. 20 Section 20. 71.28 (1dx) (b) (intro.) of the statutes is amended to read:

AB419,8,9 71.28 (1dx) (b) Credit. (intro.) Except as provided in pars. (be) and (bg) and in s. 73.03 (35), and subject to s. 560.785, for any taxable year for which the person is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3), 560.797 (4) or 560.798 (3), any person may claim as a credit against the taxes imposed on the person's income from the person's business activities in a development zone under this subchapter the following amounts:

AB419, s. 21 Section 21. 71.28 (1dx) (be) of the statutes is amended to read:

AB419,8,15 71.28 (1dx) (be) Offset. A claimant in a development zone under s. 560.795 (1) (e) may offset any credits claimed under this subsection, including any credits carried over, against the amount of the tax otherwise due under this subchapter attributable to all of the claimant's income and against the tax attributable to income from directly related business operations of the claimant.

AB419, s. 22 Section 22. 71.47 (1di) (b) 1. of the statutes is repealed.

AB419, s. 23 Section 23. 71.47 (1di) (b) 3. of the statutes is amended to read:

AB419,9,8 71.47 (1di) (b) 3. Partnerships, limited liability companies and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or limited liability company shall compute the amount of the credit that may be claimed by each of its shareholders, partners or members and shall provide that information to each of its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone; except that a claimant in a development zone under s. 560.795 (1) (e) may offset the credit, including any credits carried over, against the amount of the tax otherwise due under this chapter attributable to all of the claimant's income; and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.