AB622: Bill Text

Analysis by the Legislative Reference Bureau

This bill creates an income and franchise tax credit for work provided by a community rehabilitation program to a business. The amount of the credit equals 5 percent of the amount the taxpayer paid in the taxable year to a community rehabilitation program to perform work for the taxpayer's business, pursuant to a contract. The maximum amount that a taxpayer may claim in a taxable year is $25,000 for each community rehabilitation program for which the taxpayer enters into a contract to perform work. If the credit claimed by a taxpayer exceeds the taxpayer's tax liability, the state will not issue a refund check, but the taxpayer may carry forward any remaining credit to subsequent 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:

AB622, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB622,2,6 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), (3w), (5b), 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).

AB622, s. 2 Section 2. 71.07 (3w) of the statutes is created to read:

AB622,2,9 71.07 (3w) Community rehabilitation program credit. (a) Definitions. In this subsection:

AB622,2,10 1. "Claimant" means a person who files a claim under this subsection.

AB622,2,14 2. "Community rehabilitation program" means a nonprofit entity, county, municipality, or federal agency that directly provides, or facilitates the provision of, vocational rehabilitation services to individuals who have disabilities to maximize the employment opportunities, including career advancement, of such individuals.

AB622,2,16 3. "Vocational rehabilitation services" include education, training, employment, counseling, therapy, placement, and case management.

AB622,2,19 4. "Work" includes production, packaging, assembly, food service, custodial service, clerical service, and other commercial activities that improve employment opportunities for individuals who have disabilities.

AB622,2,24 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under ss. 71.02 and 71.08, up to the amount of those taxes, an amount equal to 5 percent of the amount the claimant paid in the taxable year to a community rehabilitation program to perform work for the claimant's business, pursuant to a contract.

AB622,3,4 (c) Limitations. 1. The maximum amount that any claimant may claim under this subsection in a taxable year is $25,000 for each community rehabilitation program for which the claimant enters into a contract to have the community rehabilitation program perform work for the claimant's business.

AB622,3,9 2. No credit may be claimed under this subsection unless the claimant submits with the claimant's return a form, as prescribed by the department of revenue, that verifies that the claimant has entered into a contract with a community rehabilitation program and that the program has received payment from the claimant for work provided by the program, consistent with par. (b).

AB622,3,17 3. 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. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

AB622,3,19 (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.

AB622, s. 3 Section 3. 71.08 (1) (intro.) of the statutes is amended to read:

AB622,4,4 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust, or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2fd), (3m), (3n), (3s), (3t), (3w), (5b), (5d), (6), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m), (3), (3n), and (3t), and (3w), and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m), (3), (3n), and (3t), and (3w), and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust, or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:

AB622, s. 4 Section 4. 71.10 (4) (gbn) of the statutes is created to read:

AB622,4,6 71.10 (4) (gbn) Community rehabilitation program credit under s. 71.07 (3w).

AB622, s. 5 Section 5. 71.21 (4) of the statutes is amended to read:

AB622,4,10 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), and (5b) and passed through to partners shall be added to the partnership's income.

AB622, s. 6 Section 6. 71.26 (2) (a) of the statutes is amended to read:

AB622,5,4 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), (3w), and (5b) 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).

AB622, s. 7 Section 7. 71.28 (3w) of the statutes is created to read:

AB622,5,7 71.28 (3w) Community rehabilitation program credit. (a) Definitions. In this subsection:

AB622,5,8 1. "Claimant" means a person who files a claim under this subsection.

AB622,5,12 2. "Community rehabilitation program" means a nonprofit entity, county, municipality, or federal agency that directly provides, or facilitates the provision of, vocational rehabilitation services to individuals who have disabilities to maximize the employment opportunities, including career advancement, of such individuals.

AB622,5,14 3. "Vocational rehabilitation services" include education, training, employment, counseling, therapy, placement, and case management.

AB622,5,17 4. "Work" includes production, packaging, assembly, food service, custodial service, clerical service, and other commercial activities that improve employment opportunities for individuals who have disabilities.

AB622,5,22 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, an amount equal to 5 percent of the amount the claimant paid in the taxable year to a community rehabilitation program to perform work for the claimant's business, pursuant to a contract.

AB622,6,2 (c) Limitations. 1. The maximum amount that any claimant may claim under this subsection in a taxable year is $25,000 for each community rehabilitation program for which the claimant enters into a contract to have the community rehabilitation program perform work for the claimant's business.

AB622,6,7 2. No credit may be claimed under this subsection unless the claimant submits with the claimant's return a form, as prescribed by the department of revenue, that verifies that the claimant has entered into a contract with a community rehabilitation program and that the program has received payment from the claimant for work provided by the program, consistent with par. (b).

AB622,6,15 3. 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. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

AB622,6,17 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB622, s. 8 Section 8. 71.30 (3) (bn) of the statutes is created to read:

AB622,6,19 71.30 (3) (bn) Community rehabilitation program credit under s. 71.28 (3w).

AB622, s. 9 Section 9. 71.34 (1) (g) of the statutes is amended to read:

AB622,6,23 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), (3w), and (5b) and passed through to shareholders.

AB622, s. 10 Section 10. 71.45 (2) (a) 10. of the statutes is amended to read:

AB622,7,6 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (3n), (3w), and (5b) 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).

AB622, s. 11 Section 11. 71.47 (3w) of the statutes is created to read:

AB622,7,9 71.47 (3w) Community rehabilitation program credit. (a) Definitions. In this subsection:

AB622,7,10 1. "Claimant" means a person who files a claim under this subsection.

AB622,7,14 2. "Community rehabilitation program" means a nonprofit entity, county, municipality, or federal agency that directly provides, or facilitates the provision of, vocational rehabilitation services to individuals who have disabilities to maximize the employment opportunities, including career advancement, of such individuals.

AB622,7,16 3. "Vocational rehabilitation services" include education, training, employment, counseling, therapy, placement, and case management.

AB622,7,19 4. "Work" includes production, packaging, assembly, food service, custodial service, clerical service, and other commercial activities that improve employment opportunities for individuals who have disabilities.

AB622,7,24 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, an amount equal to 5 percent of the amount the claimant paid in the taxable year to a community rehabilitation program to perform work for the claimant's business, pursuant to a contract.

AB622,8,4 (c) Limitations. 1. The maximum amount that any claimant may claim under this subsection in a taxable year is $25,000 for each community rehabilitation program for which the claimant enters into a contract to have the community rehabilitation program perform work for the claimant's business.

AB622,8,9 2. No credit may be claimed under this subsection unless the claimant submits with the claimant's return a form, as prescribed by the department of revenue, that verifies that the claimant has entered into a contract with a community rehabilitation program and that the program has received payment from the claimant for work provided by the program, consistent with par. (b).

AB622,8,17 3. 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. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

AB622,8,19 (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.

AB622, s. 12 Section 12. 71.49 (1) (bn) of the statutes is created to read:

AB622,8,21 71.49 (1) (bn) Community rehabilitation program credit under s. 71.47 (3w).

AB622, s. 13 Section 13. 77.92 (4) of the statutes is amended to read:

AB622,9,12 77.92 (4) "Net business income," with respect to a partnership, means taxable income as calculated under section 703 of the Internal Revenue Code; plus the items of income and gain under section 702 of the Internal Revenue Code, including taxable state and municipal bond interest and excluding nontaxable interest income or dividend income from federal government obligations; minus the items of loss and deduction under section 702 of the Internal Revenue Code, except items that are not deductible under s. 71.21; plus guaranteed payments to partners under section 707 (c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3s), (3n), (3t), (3w), and (5b); and plus or minus, as appropriate, transitional adjustments, depreciation differences, and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain, loss, and deductions from farming. "Net business income," with respect to a natural person, estate, or trust, means profit from a trade or business for federal income tax purposes and includes net income derived as an employee as defined in section 3121 (d) (3) of the Internal Revenue Code.

AB622, s. 14 Section 14. Initial applicability.

AB622,9,17 (1) This act first applies to taxable years beginning on January 1 of the year in which this subsection takes effect, except that if this subsection takes effect after July 31 this act first applies to taxable years beginning on January 1 of the year following the year in which this subsection takes effect.

AB622,9,18 (End)