AB892: Bill Text

LRB-4262/1

JK&CTS:lmk&jld:rs

2005 - 2006 LEGISLATURE

2005 Assembly BILL 892

December 22, 2005 - Introduced by Representatives Montgomery, Davis, Gard, Lamb, Freese, Rhoades, Fields, Gunderson, Albers, Vos, Nischke and Musser, cosponsored by Senators Kanavas, Jauch, Leibham, Harsdorf, Stepp, Schultz, Kedzie and Olsen. Referred to Committee on Energy and Utilities.

AB892,1,5 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) (gy), 71.28 (5e), 71.30 (3) (es), 71.47 (5e) and 71.49 (1) (es) of the statutes; relating to: an income and franchise tax credit for sales and use taxes paid on the purchase of Internet equipment used in the broadband market.

Analysis by the Legislative Reference Bureau

This bill creates an income and franchise tax credit for Internet equipment used in the broadband market. The amount of the credit is equal to the the amount of sales and use taxes that the taxpayer paid in the taxable year on the purchase of Internet equipment used in the broadband market to provide Internet availability to areas of the state that are not served by a broadband service provider or are served by not more than one broadband service provider, as determined by the Department of Commerce (department). The total amount of the credits that may be claimed by all taxpayers is $7,500,000. A taxpayer may only claim the credit if the taxpayer certifies to the department that the taxpayer will, within 24 months from the bill's effective date, make an investment that is reasonable calculated to increase Internet availability in this state and in an amount equal to at least 20 percent of the amount of the sales and use taxes that the taxpayer paid during the 12-month period beginning on the bill's effective date on the purchase of Internet equipment used in the broadband market.

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:

AB892, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB892,2,6 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).

AB892, s. 2 Section 2. 71.07 (5e) of the statutes is created to read:

AB892,2,8 71.07 (5e) Internet equipment credit. (a) Definitions. In this subsection:

AB892,2,9 1. "Claimant" means a person who files a claim under this subsection.

AB892,2,12 2. "Internet equipment used in the broadband market" means equipment that is capable of transmitting data packets or Internet signals at speeds of at least 200 kilobits per second in either direction.

AB892,2,20 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the taxes imposed under ss. 71.02 and 71.08, up to the amount of those taxes, an amount that is equal to the amount of the taxes imposed under subchs. III and V of ch. 77 that the claimant paid in the taxable year on the purchase of Internet equipment used in the broadband market to provide Internet availability to areas of the state that are not served by a broadband service provider or are served by not more than one broadband service provider, as determined by the department of commerce.

AB892,3,14 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant certifies to the department of commerce, in the manner prescribed by the department, that the claimant will, within 24 months after the effective date of this subdivision .... [revisor inserts date], make an investment that is reasonably calculated to increase Internet availability in this state and in an amount equal to at least 20 percent of the amount the claimant paid in taxes imposed under subchs. III and V of ch. 77 on the purchase of Internet equipment used in the broadband market during the 12-month period beginning on the effective date of this subdivision .... [revisor inserts date]. The claimant shall, within 60 days after the end of the year in which the investment is made, file a report with the department of administration that provides a detailed description of the investment, including the amount invested. The department of administration shall provide copies of the report to the department of commerce, the department of revenue, and the public service commission.

AB892,3,22 2. 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 the amounts described 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.

AB892,3,25 3. The total amount of the credits that may be claimed by all claimants under this subsection and ss. 71.28 (5e) and 71.47 (5e) is $7,500,000, as determined by the department of commerce.

AB892,4,2 (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.

AB892, s. 3 Section 3. 71.10 (4) (gy) of the statutes is created to read:

AB892,4,4 71.10 (4) (gy) Internet equipment credit under s. 71.07 (5e).

AB892, s. 4 Section 4. 71.21 (4) of the statutes is amended to read:

AB892,4,8 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.

AB892, s. 5 Section 5. 71.26 (2) (a) of the statutes is amended to read:

AB892,5,2 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).

AB892, s. 6 Section 6. 71.28 (5e) of the statutes is created to read:

AB892,5,4 71.28 (5e) Internet equipment credit. (a) Definitions. In this subsection:

AB892,5,5 1. "Claimant" means a person who files a claim under this subsection.

AB892,5,8 2. "Internet equipment used in the broadband market" means equipment that is capable of transmitting data packets or Internet signals at speeds of at least 200 kilobits per second in either direction.

AB892,5,16 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the taxes imposed under s. 71.23, up to the amount of those taxes, an amount that is equal to the amount of the taxes imposed under subchs. III and V of ch. 77 that the claimant paid in the taxable year on the purchase of Internet equipment used in the broadband market to provide Internet availability to areas of the state that are not served by a broadband service provider or are served by not more than one broadband service provider, as determined by the department of commerce.

AB892,6,5 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant certifies to the department of commerce, in the manner prescribed by the department, that the claimant will, within 24 months after the effective date of this subdivision .... [revisor inserts date], make an investment that is reasonably calculated to increase Internet availability in this state and in an amount equal to at least 20 percent of the amount the claimant paid in taxes imposed under subchs. III and V of ch. 77 on the purchase of Internet equipment used in the broadband market during the 12-month period beginning on the effective date of this subdivision .... [revisor inserts date]. The claimant shall, within 60 days after the end of the year in which the investment is made, file a report with the department of administration that provides a detailed description of the investment, including the amount invested. The department of administration shall provide copies of the report to the department of commerce, the department of revenue, and the public service commission.

AB892,6,13 2. 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 the amounts described 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.

AB892,6,16 3. The total amount of the credits that may be claimed by all claimants under this subsection and ss. 71.07 (5e) and 71.47 (5e) is $7,500,000, as determined by the department of commerce.

AB892,6,18 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB892, s. 7 Section 7. 71.30 (3) (es) of the statutes is created to read:

AB892,6,20 71.30 (3) (es) Internet equipment credit under s. 71.28 (5e).

AB892, s. 8 Section 8. 71.34 (1) (g) of the statutes is amended to read:

AB892,6,24 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.

AB892, s. 9 Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:

AB892,7,6 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (3n), 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).

AB892, s. 10 Section 10. 71.47 (5e) of the statutes is created to read:

AB892,7,8 71.47 (5e) Internet equipment credit. (a) Definitions. In this subsection:

AB892,7,9 1. "Claimant" means a person who files a claim under this subsection.

AB892,7,12 2. "Internet equipment used in the broadband market" means equipment that is capable of transmitting data packets or Internet signals at speeds of at least 200 kilobits per second in either direction.

AB892,7,20 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the taxes imposed under s. 71.43, up to the amount of those taxes, an amount that is equal to the amount of the taxes imposed under subchs. III and V of ch. 77 that the claimant paid in the taxable year on the purchase of Internet equipment used in the broadband market to provide Internet availability to areas of the state that are not served by a broadband service provider or are served by not more than one broadband service provider, as determined by the department of commerce.

AB892,8,9 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant certifies to the department of commerce, in the manner prescribed by the department, that the claimant will, within 24 months after the effective date of this subdivision .... [revisor inserts date], make an investment that is reasonably calculated to increase Internet availability in this state and in an amount equal to at least 20 percent of the amount the claimant paid in taxes imposed under subchs. III and V of ch. 77 on the purchase of Internet equipment used in the broadband market during the 12-month period beginning on the effective date of this subdivision .... [revisor inserts date]. The claimant shall, within 60 days after the end of the year in which the investment is made, file a report with the department of administration that provides a detailed description of the investment, including the amount invested. The department of administration shall provide copies of the report to the department of commerce, the department of revenue, and the public service commission.