AB748: Bill Text

LRB-2637/1

MES&JK&DAK:bjk&jld:rs

2007 - 2008 LEGISLATURE

2007 Assembly BILL 748

February 4, 2008 - Introduced by Representatives Hraychuck, Garthwaite, Staskunas, Berceau, Boyle, Cullen, Fields, Hilgenberg, Hixson, Mason, Molepske, Musser, Nelson, Roth, Sheridan, Shilling, Sinicki, Soletski, Turner, Vruwink, A. Williams and Toles, cosponsored by Senators Kreitlow, Harsdorf, Coggs, Hansen, Roessler and Schultz. Referred to Committee on Health and Healthcare Reform.

AB748,1,6 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 49.45 (2) (a) 25g., 71.07 (5r), 71.10 (4) (cd), 71.28 (5r), 71.30 (3) (dr), 71.47 (5r) and 71.49 (1) (dr) of the statutes; relating to: creating a nonrefundable individual and corporate income tax credit for health care providers who provide services to Medical Assistance recipients at a higher than average rate.

Analysis by the Legislative Reference Bureau

This bill creates a nonrefundable individual and corporate income tax credit for primary care physicians and dentists who provide services to Medical Assistance (MA) recipients at a high rate of service, compared to other physicians and dentists who serve MA patients. The credit is for certain costs of providing medical and dental services that are not reimbursed under the MA program. Sole proprietorships and corporations may claim the credit. Partnerships, limited liability companies, and tax-option corporations compute the credit but pass it on to the partners, members, and shareholders in proportion to their ownership interests.

The credit that may be claimed is equal to a physician's or dentist's unreimbursed costs that are incurred in the taxable year to which the claim relates. Because the credit is nonrefundable, it may only be claimed up to the amount of the taxpayer's tax liability. The bill defines unreimbursed costs as the difference between a physician's or dentist's usual and customary charges for providing a medical or dental service, and the amount paid to the physician or dentist for providing such services to MA recipients. The bill defines rate of service as the percentage of a dentist's or physician's patients who receive MA, and defines high rate of service as a rate of service provided by a dentist or a physician to MA recipients that is at least 200 percent greater than the average rate of service provided by all dentists or physicians, as required to be determined by the Department of Health and Family Services.

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:

AB748, s. 1 Section 1. 49.45 (2) (a) 25g. of the statutes is created to read:

AB748,2,5 49.45 (2) (a) 25g. Determine the average rate of service to medical assistance recipients provided by all dentists, as defined in s. 447.01 (7), and physicians, as defined in s. 448.01 (5), for purposes of computing a high rate of service of a dentist or physician under ss. 71.07 (5r), 71.28 (5r), and 71.47 (5r).

AB748, s. 2 Section 2. 71.05 (6) (a) 15. of the statutes is amended to read:

AB748,2,11 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), (5d), and (5e), (5f), and (5h), and (5r) 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).

AB748, s. 3 Section 3. 71.07 (5r) of the statutes is created to read:

AB748,2,14 71.07 (5r) High rate of medical and dental services tax credit. (a) Definitions. In this subsection:

AB748,2,17 1. "Claimant" means a sole proprietor, a partner, a member of a limited liability company, or a shareholder of a tax-option corporation who is a physician or dentist who provides a high rate of service and who files a claim under this subsection.

AB748,3,3 2. "Dentist" means a dentist, as defined in s. 447.01 (7), who is licensed under ch. 447, who practices general or pediatric dentistry, and who provides services to medical assistance recipients.

AB748,3,7 3. "High rate of service" means a rate of service provided by a dentist or a physician to medical assistance recipients that is at least 200 percent greater than the average rate of service provided by all dentists or physicians, as determined by the department of health and family services.

AB748,3,8 4. "Medical assistance" has the meaning given in s. 49.43 (8).

AB748,3,11 5. "Physician" means a physician, as defined in s. 448.01 (5), specializing in family medical practice, general internal medicine, or pediatrics and who provides services to medical assistance recipients.

AB748,3,13 6. "Rate of service" means the percentage of a dentist's or physician's patients who receive medical assistance.

AB748,3,19 7. "Unreimbursed costs" means the difference between either a physician's usual and customary charges for providing a service specified under s. 49.46 (2) (a) 1., and the amount paid to the physician under s. 49.45 (3) for providing such service to recipients of medical assistance, or the difference between a dentist's usual and customary charges for providing a dental service, and the amount paid to the dentist under s. 49.45 (3) for providing such service to recipients of medical assistance.

AB748,3,23 (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 claimant's unreimbursed costs that are incurred in the taxable year to which the claim relates.

AB748,3,25 (c) Limitations. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

AB748,4,2 2. The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit under s. 71.28 (4), apply to the credit under this subsection.

AB748,4,11 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, that credit shall be determined on the basis of their economic activity, not that of their partners, members, or shareholders. 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.

AB748,4,21 4. For a claimant 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.

AB748,4,23 (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

AB748, s. 4 Section 4. 71.10 (4) (cd) of the statutes is created to read:

AB748,5,2 71.10 (4) (cd) The high rate of medical and dental services tax credit under s. 71.07 (5r).

AB748, s. 5 Section 5. 71.21 (4) of the statutes is amended to read:

AB748,5,6 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), (5b), (5e), (5f), (5g), and (5h), and (5r) and passed through to partners shall be added to the partnership's income.

AB748, s. 6 Section 6. 71.26 (2) (a) of the statutes is amended to read:

AB748,5,25 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), (5b), (5e), (5f), (5g), and (5h), and (5r) 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).

AB748, s. 7 Section 7. 71.28 (5r) of the statutes is created to read:

AB748,6,3 71.28 (5r) High rate of medical and dental services tax credit. (a) Definitions. In this subsection:

AB748,6,6 1. "Claimant" means a corporation that includes at least one physician or dentist who provides a high rate of service and that files a claim under this subsection.

AB748,6,9 2. "Dentist" means a dentist, as defined in s. 447.01 (7), who is licensed under ch. 447, who practices general or pediatric dentistry, and who provides services to medical assistance recipients.

AB748,6,13 3. "High rate of service" means a rate of service provided by a dentist or a physician to medical assistance recipients that is at least 200 percent greater than the average rate of service provided by all dentists or physicians, as determined by the department of health and family services.

AB748,6,14 4. "Medical assistance" has the meaning given in s. 49.43 (8).

AB748,6,17 5. "Physician" means a physician, as defined in s. 448.01 (5), specializing in family medical practice, general internal medicine, or pediatrics and who provides services to medical assistance recipients.

AB748,6,19 6. "Rate of service" means the percentage of a dentist's or physician's patients who receive medical assistance.

AB748,6,25 7. "Unreimbursed costs" means the difference between either a physician's usual and customary charges for providing a service specified under s. 49.46 (2) (a) 1., and the amount paid to the physician under s. 49.45 (3) for providing such service to recipients of medical assistance, or the difference between a dentist's usual and customary charges for providing a dental service, and the amount paid to the dentist under s. 49.45 (3) for providing such service to recipients of medical assistance.

AB748,7,4 (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 the claimant's unreimbursed costs that are incurred in the taxable year to which the claim relates.

AB748,7,6 (c) Limitations. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

AB748,7,8 2. The carry-over provisions of sub. (4) (e) and (f), as they apply to the credit under sub. (4), apply to the credit under this subsection.

AB748,7,17 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, that credit shall be determined on the basis of their economic activity, not that of their partners, members, or shareholders. 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.