SB566: Bill Text

SB566,5,21 c. It is engaged in, or has committed to engage in, manufacturing, agriculture, processing or assembling products, conducting research and development, or developing a new product or business process.

SB566,5,25 d. It is not engaged in real estate development; insurance; banking; lending; lobbying; political consulting; professional services proved by attorneys, accountants, business consultants, physicians, or health care consultants; wholesale or retail trade; leisure; hospitality; transportation; or construction.

SB566,6,1 e. It has less than 500 employees.

SB566,6,2 f. It has been in operation in this state for not more than 7 consecutive years.

SB566,6,8 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, an amount equal to the long-term gain that is not excluded from taxation under s. 71.05 (6) (b), that is realized by the claimant in the taxable year to which the claim under this subsection relates, multiplied by the claimant's marginal tax rate.

SB566,6,10 (c) Limitations. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

SB566,6,12 2. No credit may be allowed under this subsection unless the claimant immediately deposits the gain into a segregated account in a financial institution.

SB566,6,15 3. No credit may be allowed under this subsection unless the claimant, within 180 days after the sale of the asset that generated the gain, invests in a Wisconsin business using all of the proceeds in the account described under subd. 2.

SB566,6,20 4. No credit may be allowed under this subsection unless the claimant, after investing in a Wisconsin business as described under subd. 3., immediately notifies the department of revenue, on a form prepared by the department, that the claimant will not declare on the claimant's income tax return the gain described under subd. 2. because the claimant has reinvested the capital gain as described under subd. 3.

SB566,6,23 5. The basis of the investment described in subd. 3. shall be calculated by subtracting the gain described in subd. 2. from the cost of the investment described in subd. 3.

SB566,7,3 6. If a claimant claims the credit under this subsection, the claimant may not use the gain described under subd. 2. to net capital gains and losses, as described under s. 71.05 (10) (c).

SB566,7,13 7. For a claimant who is an individual, who is a nonresident or part-year resident of this state, and who is a single person or a married person filing a separate return, multiply the credit for which the claimant is eligible under par. (b) by a fraction the numerator of which is the individual's Wisconsin adjusted gross income and the denominator of which is the individual's federal adjusted gross income. If a claimant is married and files a joint return, and if the claimant or the claimant's spouse, or both, are nonresidents or part-year residents of this state, multiply the credit for which the claimant is eligible under par. (b) by a fraction the numerator of which is the couple's joint Wisconsin adjusted gross income and the denominator of which is the couple's joint federal adjusted gross income.

SB566,7,21 8. 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 receipt of interest 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 interest.

SB566,7,23 (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

SB566, s. 4 Section 4. 71.10 (4) (ce) of the statutes is created to read:

SB566,8,2 71.10 (4) (ce) The long-term capital gains; Wisconsin businesses tax credit under s. 71.07 (6g).

SB566, s. 5 Section 5. 71.10 (4) (cg) of the statutes is created to read:

SB566,8,4 71.10 (4) (cg) Wisconsin business offerings credit under s. 71.07 (5e).

SB566, s. 6 Section 6. 71.21 (4) of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB566,8,9 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (5b), (5e), and (5g) and passed through to partners shall be added to the partnership's income.

SB566, s. 7 Section 7. 71.26 (2) (a) of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB566,9,4 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), (5b), (5e), and (5g) 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).

SB566, s. 8 Section 8. 71.28 (5e) of the statutes is created to read:

SB566,9,7 71.28 (5e) Wisconsin business offerings credit. (a) Definitions. In this subsection:

SB566,9,8 1. "Agent" has the meaning given in s. 551.02 (2).

SB566,9,9 2. "Broker-dealer" has the meaning given in s. 551.02 (3).

SB566,9,11 3. "Claimant" means an agent or a broker-dealer who files a claim under this subsection.

SB566,9,12 4. "Wisconsin business" has the meaning given in s. 71.07 (6g) (a) 4.

SB566,9,16 (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 the tax, an amount equal to 10 percent of the first $500,000 raised in an offering of a Wisconsin business in the taxable year.

SB566,9,19 (c) Limitations. 1. The maximum amount of the credits that may be claimed in each taxable year under this subsection and ss. 71.07 (5e) and 71.47 (5e) is $3,000,000.

SB566,9,25 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 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.

SB566,10,4 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB566, s. 9 Section 9. 71.30 (3) (epp) of the statutes is created to read:

SB566,10,6 71.30 (3) (epp) Wisconsin business offerings credit under s. 71.28 (5e).

SB566, s. 10 Section 10. 71.34 (1) (g) of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB566,10,11 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), (5b), (5e), and (5g) and passed through to shareholders.

SB566, s. 11 Section 11. 71.45 (2) (a) 10. of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB566,10,19 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (3n), (5b), (5e), and (5g) 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).

SB566, s. 12 Section 12. 71.47 (5e) of the statutes is created to read:

SB566,10,22 71.47 (5e) Wisconsin business offerings credit. (a) Definitions. In this subsection:

SB566,10,23 1. "Agent" has the meaning given in s. 551.02 (2).

SB566,10,24 2. "Broker-dealer" has the meaning given in s. 551.02 (3).

SB566,11,2 3. "Claimant" means an agent or a broker-dealer who files a claim under this subsection.

SB566,11,3 4. "Wisconsin business" has the meaning given in s. 71.07 (6g) (a) 4.

SB566,11,7 (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 the tax, an amount equal to 10 percent of the first $500,000 raised in an offering of a Wisconsin business in the taxable year.

SB566,11,10 (c) Limitations. 1. The maximum amount of the credits that may be claimed in each taxable year under this subsection and ss. 71.07 (5e) and 71.28 (5e) is $3,000,000.

SB566,11,18 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 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.

SB566,11,20 (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.

SB566, s. 13 Section 13. 71.49 (1) (epp) of the statutes is created to read:

SB566,11,22 71.49 (1) (epp) Wisconsin business offerings credit under s. 71.47 (5e).

SB566, s. 14 Section 14. 77.92 (4) of the statutes, as affected by 2005 Wisconsin Act 74, is amended to read:

SB566,12,15 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), (5b), (5e), and (5g); 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.

SB566, s. 15 Section 15. 180.0622 (2) (a) of the statutes is renumbered 180.0622 (2) and amended to read:

SB566,12,21 180.0622 (2) Except as provided in par. (b) or unless Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation, except that a shareholder may become personally liable by his or her acts or conduct other than as a shareholder.

SB566, s. 16 Section 16. 180.0622 (2) (b) of the statutes is repealed.

SB566, s. 17 Section 17. 551.02 (4w) of the statutes is created to read:

SB566,13,3 551.02 (4w) "Finder" means a person whose activities are limited to identifying, introducing, or both, a potential investor to a broker-dealer licensed in this state, or an issuer, who subsequently sells a security to the potential investor, if the person's activities result in sales of an issuer's securities that do not exceed $1,000,000 in any period of 12 consecutive months.

SB566, s. 18 Section 18. 551.23 (10) of the statutes is amended to read:

SB566,13,12 551.23 (10) Any offer or sale of its securities by an issuer having its principal office in this state, if the aggregate number of persons holding directly or indirectly all of the issuer's securities, after the securities to be issued are sold, does not exceed 25 100, exclusive of persons under sub. (8), if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state, except to broker-dealers and agents licensed in this state and to finders, and if no advertising is published unless it has been permitted by filed with the division within 3 business days of the adverstising's first use.

SB566, s. 19 Section 19. 551.23 (11) (a) of the statutes is amended to read:

SB566,13,24 551.23 (11) (a) Any transaction pursuant to an offer directed by the offeror to not more than 25 300 persons in this state, excluding persons exempt under sub. (8) but including persons exempt under sub. (10), during any period of 12 consecutive months, whether or not the offeror or any of the offerees is then present in this state, if the offeror reasonably believes that all the persons in this state are purchasing for investment, and if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state other than those exempt by sub. (8) except for commission or other remuneration paid or given directly or indirectly to broker-dealers and agents licensed in this state and to finders, and if no advertising is published unless it has been filed with the division within 3 business days of the adverstising's first use.

SB566, s. 20 Section 20. 551.23 (11) (b) of the statutes is amended to read:

SB566,14,4 551.23 (11) (b) The division may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption, or increase or decrease the number of offerees permitted, or waive the conditions in par. (a), and may require reports of sales under this exemption.

SB566, s. 21 Section 21. 551.23 (18) of the statutes is amended to read:

SB566,14,12 551.23 (18) Any other transaction as to which the division by rule or order finds that registration is not necessary or appropriate for the protection of investors, except that any exemption adopted by rule or order under this subsection that depends, in whole or in part, on the aggregate offering price of securities sold in an offering to persons in this state shall apply to a transaction in which such price does not exceed $20,000,000 or any greater amount specified by the division by rule or order.

SB566, s. 22 Section 22. 551.53 (1) (b) of the statutes is amended to read:

SB566,14,17 551.53 (1) (b) That has not been filed with the division not later than the date of publication or circulation, except for advertising relating to a federal covered security or except as the division may otherwise provide by rule or order and except as provided in s. 551.23 (10) and (11) (a).

SB566, s. 23 Section 23. Initial applicability.

SB566,14,22 (1) Wisconsin business offerings tax credit. The treatment of sections 71.05 (6) (a) 15., 71.07 (5e), 71.10 (4) (cg), 71.21 (4), 71.26 (2) (a), 71.28 (5e), 71.30 (3) (epp), 71.34 (1) (g), 71.45 (2) (a) 10., 71.47 (5e), 71.49 (1) (epp), and 77.92 (4) of the statutes first applies to taxable years beginning on January 1, 2006.

SB566,14,25 (2) Long-term capital gains; Wisconsin businesses tax credit. The treatment of section 71.07 (6g) of the statutes first applies to taxable years beginning on January 1, 2006.

SB566,15,2 (3) Shareholder liability. The treatment of section 180.0622 (2) (a) and (b) of the statutes first applies to debts incurred on the effective date of this subsection.

SB566, s. 24 Section 24. Effective dates. This act takes effect on the day after publication, except as follows:

SB566,15,7 (1) Security exemptions. The treatment of section 551.23 (10), (11) (a) and (b), and (18) of the statutes takes effect on first day of the 3rd month beginning after publication.

SB566,15,8 (End)