LRB-3854/2
JK:kjf:jf
2005 - 2006 LEGISLATURE
November 3, 2005 - Introduced by Representatives Sheridan, Freese, Hahn,
Benedict, Bies, Davis, Gronemus, Gunderson, Hebl, Hines, Kreibich, Lamb,
Lothian, Molepske, Musser, Seidel, Towns, Turner
and Vruwink,
cosponsored by Senators Harsdorf and Hansen. Referred to Committee on
Rural Affairs and Renewable Energy.
AB809,1,5 1An Act to amend 71.05 (6) (a) 15., 71.08 (1) (intro.), 71.21 (4), 71.26 (2) (a), 71.34
2(1) (g), 71.45 (2) (a) 10. and 77.92 (4); and to create 71.07 (5e), 71.10 (4) (gn),
371.28 (5e), 71.30 (3) (dq), 71.47 (5e) and 71.49 (1) (dq) of the statutes; relating
4to:
creating an income and franchise tax credit for motor vehicles that use
5gasoline and ethanol mixtures as fuel.
Analysis by the Legislative Reference Bureau
This bill creates an income and franchise tax credit that is equal to the amount
of sales and use taxes a person paid in the taxable year on the purchase of any new
motor vehicle that is licensed for highway use and capable of using both gasoline and
a mixture of gasoline and at least 85 percent ethanol as a fuel to propel the motor
vehicle. The amount of the credit that a person may claim may not exceed an amount
equal to $1,000 for each motor vehicle purchased in the taxable year. The credit may
be claimed for taxable years beginning after December 31, 2005, and before January
1, 2011.
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:
AB809, s. 1
1Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:
AB809,2,62 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
3(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3n), (3s), (3t), (5b), and (5d), and (5e)
4and not passed through by a partnership, limited liability company, or tax-option
5corporation that has added that amount to the partnership's, company's, or
6tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).
AB809, s. 2 7Section 2. 71.07 (5e) of the statutes is created to read:
AB809,2,98 71.07 (5e) Flexible fuel motor vehicles credit. (a) Definitions. In this
9subsection, "claimant" means a person who files a claim under this subsection.
AB809,2,1710 (b) Filing claims. Subject to the limitations provided under this subsection, for
11taxable years beginning after December 31, 2005, and before January 1, 2011, a
12claimant may claim as a credit against the taxes imposed under ss. 71.02 and 71.08,
13up to the amount of the taxes, an amount that is equal to the amount of the taxes
14imposed under subch. III of ch. 77 that the claimant paid in the taxable year on the
15purchase of any new motor vehicle, licensed for highway use, that is capable of using
16both gasoline and a mixture of gasoline and at least 85 percent ethanol as a fuel to
17propel the motor vehicle.
AB809,2,2118 (c) Limitations. 1. The maximum amount of the credit that a claimant may
19claim under this subsection in a taxable year is an amount equal to $1,000,
20multiplied by the number of motor vehicles described under par. (b) that the claimant
21purchased in the taxable year.
AB809,3,422 2. Partnerships, limited liability companies, and tax-option corporations may
23not claim the credit under this subsection, but the eligibility for, and the amount of,
24the credit are based on their payment of amounts described under par. (b). A
25partnership, limited liability company, or tax-option corporation shall compute the

1amount of credit that each of its partners, members, or shareholders may claim and
2shall provide that information to each of them. Partners, members of limited liability
3companies, and shareholders of tax-option corporations may claim the credit in
4proportion to their ownership interests.
AB809,3,65 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
6s. 71.28 (4), applies to the credit under this subsection.
AB809, s. 3 7Section 3. 71.08 (1) (intro.) of the statutes, as affected by 2005 Wisconsin Act
825
, is amended to read:
AB809,3,179 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
10couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
11ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2fd), (3m), (3n), (3s),
12(3t), (5b), (5d), (5e), (6), (6e), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds),
13(1dx), (1fd), (2m), (3), (3n), and (3t), and (5e), and 71.47 (1dd), (1de), (1di), (1dj), (1dL),
14(1ds), (1dx), (1fd), (2m), (3), (3n), and (3t), and (5e), and subchs. VIII and IX and
15payments to other states under s. 71.07 (7), is less than the tax under this section,
16there is imposed on that natural person, married couple filing jointly, trust, or estate,
17instead of the tax under s. 71.02, an alternative minimum tax computed as follows:
AB809, s. 4 18Section 4. 71.10 (4) (gn) of the statutes is created to read:
AB809,3,1919 71.10 (4) (gn) Flexible fuel motor vehicles credit under s. 71.07 (5e).
AB809, s. 5 20Section 5. 71.21 (4) of the statutes is amended to read:
AB809,3,2321 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
22(2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), and (5b), and (5e) and passed
23through to partners shall be added to the partnership's income.
AB809, s. 6 24Section 6. 71.26 (2) (a) of the statutes is amended to read:
AB809,4,18
171.26 (2) (a) Corporations in general. The "net income" of a corporation means
2the gross income as computed under the Internal Revenue Code as modified under
3sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
4computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c)
57., the amount of the credit under s. 71.28 (3) that the taxpayer added to income
6under this paragraph at the time that the taxpayer first claimed the credit plus the
7amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm),
8(1ds), (1dx), (3g), (3n), (3t), and (5b), and (5e) and not passed through by a
9partnership, limited liability company, or tax-option corporation that has added that
10amount to the partnership's, limited liability company's, or tax-option corporation's
11income under s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from the sale or
12other disposition of assets the gain from which would be wholly exempt income, as
13defined in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and
14minus deductions, as computed under the Internal Revenue Code as modified under
15sub. (3), plus or minus, as appropriate, an amount equal to the difference between
16the federal basis and Wisconsin basis of any asset sold, exchanged, abandoned, or
17otherwise disposed of in a taxable transaction during the taxable year, except as
18provided in par. (b) and s. 71.45 (2) and (5).
AB809, s. 7 19Section 7. 71.28 (5e) of the statutes is created to read:
AB809,4,2120 71.28 (5e) Flexible fuel motor vehicles credit. (a) Definitions. In this
21subsection, "claimant" means a person who files a claim under this subsection.
AB809,5,422 (b) Filing claims. Subject to the limitations provided under this subsection, for
23taxable years beginning after December 31, 2005, and before January 1, 2011, a
24claimant may claim as a credit against the taxes imposed under s. 71.23, up to the
25amount of the taxes, an amount that is equal to the amount of the taxes imposed

1under subch. III of ch. 77 that the claimant paid in the taxable year on the purchase
2of any new motor vehicle, licensed for highway use, that is capable of using both
3gasoline and a mixture of gasoline and at least 85 percent ethanol as a fuel to propel
4the motor vehicle.
AB809,5,85 (c) Limitations. 1. The maximum amount of the credit that a claimant may
6claim under this subsection in a taxable year is an amount equal to $1,000,
7multiplied by the number of motor vehicles described under par. (b) that the claimant
8purchased in the taxable year.
AB809,5,169 2. Partnerships, limited liability companies, and tax-option corporations may
10not claim the credit under this subsection, but the eligibility for, and the amount of,
11the credit are based on their payment of amounts described under par. (b). A
12partnership, limited liability company, or tax-option corporation shall compute the
13amount of credit that each of its partners, members, or shareholders may claim and
14shall provide that information to each of them. Partners, members of limited liability
15companies, and shareholders of tax-option corporations may claim the credit in
16proportion to their ownership interests.
AB809,5,1817 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
18sub. (4), applies to the credit under this subsection.
AB809, s. 8 19Section 8. 71.30 (3) (dq) of the statutes is created to read:
AB809,5,2020 71.30 (3) (dq) Flexible fuel motor vehicles credit under s. 71.28 (5e).
AB809, s. 9 21Section 9. 71.34 (1) (g) of the statutes is amended to read:
AB809,5,2422 71.34 (1) (g) An addition shall be made for credits computed by a tax-option
23corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), (3g),
24(3n), (3t), and (5b), and (5e) and passed through to shareholders.
AB809, s. 10 25Section 10. 71.45 (2) (a) 10. of the statutes is amended to read:
AB809,6,6
171.45 (2) (a) 10. By adding to federal taxable income the amount of credit
2computed under s. 71.47 (1dd) to (1dx), (3n), and (5b), and (5e) and not passed
3through by a partnership, limited liability company, or tax-option corporation that
4has added that amount to the partnership's, limited liability company's, or
5tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) and the amount of
6credit computed under s. 71.47 (1), (3), (3t), (4), and (5).
AB809, s. 11 7Section 11. 71.47 (5e) of the statutes is created to read:
AB809,6,98 71.47 (5e) Flexible fuel motor vehicles credit. (a) Definitions. In this
9subsection, "claimant" means a person who files a claim under this subsection.
AB809,6,1710 (b) Filing claims. Subject to the limitations provided under this subsection, for
11taxable years beginning after December 31, 2005, and before January 1, 2011, a
12claimant may claim as a credit against the taxes imposed under s. 71.43, up to the
13amount of the taxes, an amount that is equal to the amount of the taxes imposed
14under subch. III of ch. 77 that the claimant paid in the taxable year on the purchase
15of any new motor vehicle, licensed for highway use, that is capable of using both
16gasoline and a mixture of gasoline and at least 85 percent ethanol as a fuel to propel
17the motor vehicle.
AB809,6,2118 (c) Limitations. 1. The maximum amount of the credit that a claimant may
19claim under this subsection in a taxable year is an amount equal to $1,000,
20multiplied by the number of motor vehicles described under par. (b) that the claimant
21purchased in the taxable year.
AB809,7,422 2. Partnerships, limited liability companies, and tax-option corporations may
23not claim the credit under this subsection, but the eligibility for, and the amount of,
24the credit are based on their payment of amounts described under par. (b). A
25partnership, limited liability company, or tax-option corporation shall compute the

1amount of credit that each of its partners, members, or shareholders may claim and
2shall provide that information to each of them. Partners, members of limited liability
3companies, and shareholders of tax-option corporations may claim the credit in
4proportion to their ownership interests.
AB809,7,65 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
6s. 71.28 (4), applies to the credit under this subsection.
AB809, s. 12 7Section 12. 71.49 (1) (dq) of the statutes is created to read:
AB809,7,88 71.49 (1) (dq) Flexible fuel motor vehicles credit under s. 71.47 (5e).
AB809, s. 13 9Section 13. 77.92 (4) of the statutes is amended to read:
AB809,7,2410 77.92 (4) "Net business income," with respect to a partnership, means taxable
11income as calculated under section 703 of the Internal Revenue Code; plus the items
12of income and gain under section 702 of the Internal Revenue Code, including taxable
13state and municipal bond interest and excluding nontaxable interest income or
14dividend income from federal government obligations; minus the items of loss and
15deduction under section 702 of the Internal Revenue Code, except items that are not
16deductible under s. 71.21; plus guaranteed payments to partners under section 707
17(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
18(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3s), (3n), (3t), and (5b), and (5e); and
19plus or minus, as appropriate, transitional adjustments, depreciation differences,
20and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding
21income, gain, loss, and deductions from farming. "Net business income," with respect
22to a natural person, estate, or trust, means profit from a trade or business for federal
23income tax purposes and includes net income derived as an employee as defined in
24section 3121 (d) (3) of the Internal Revenue Code.
AB809,7,2525 (End)
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