SB40: Bill Text

SB40,1037,21 71.47 (5h) (a) 4. "Previously owned property" means real property that the claimant or a related person owned during the 2 years prior to doing business in this state as a film production company and for which the claimant may not deduct a loss from the sale of the property to, or an exchange of the property with, the related person under section 267 of the Internal Revenue Code, except that section 267 of the Internal Revenue Code is modified so that if the claimant owns any part of the property, rather than 50 percent ownership, the claimant is subject to section 267 of the Internal Revenue Code for purposes of this subsection.

SB40, s. 2113 Section 2113. 71.47 (5h) (c) 2. of the statutes is amended to read:

SB40,1038,2 71.47 (5h) (c) 2. A claimant may claim the credit under par. (b) 2. for an amount expended to construct, rehabilitate, remodel, or repair real property, if the claimant began the physical work of construction, rehabilitation, remodeling, or repair, or any demolition or destruction in preparation for the physical work, after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.

SB40, s. 2114 Section 2114. 71.47 (5h) (c) 3. of the statutes is amended to read:

SB40,1038,7 71.47 (5h) (c) 3. A claimant may claim the credit under par. (b) 2. for an amount expended to acquire real property, if the property is not previously owned property and if the claimant acquires the property after December 31, 2007, or if and the completed project is placed in service after December 31, 2007.

SB40, s. 2115 Section 2115. 71.47 (5i) of the statutes is created to read:

SB40,1038,10 71.47 (5i) Electronic medical records credit. (a) Definitions. In this subsection, "claimant" means a person who files a claim under this subsection.

SB40,1038,17 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2008, a claimant may claim as a credit against the taxes imposed under s. 71.43, up to the amount of those taxes, an amount equal to 50 percent of the amount the claimant paid in the taxable year for information technology hardware or software that is used to maintain medical records in electronic form, if the claimant is a health care provider, as defined in s. 146.81 (1).

SB40,1038,20 (c) Limitations. 1. The maximum amount of the credits that may be claimed under this subsection and ss. 71.07 (5i) and 71.28 (5i) in a taxable year is $10,000,000, as allocated under s. 560.204.

SB40,1039,3 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 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.

SB40,1039,5 (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.

SB40, s. 2116 Section 2116. 71.47 (5j) of the statutes is created to read:

SB40,1039,8 71.47 (5j) Ethanol and biodiesel fuel pump credit. (a) Definitions. In this subsection:

SB40,1039,9 1. "Biodiesel fuel" has the meaning given in s. 168.14 (2m) (a).

SB40,1039,10 2. "Claimant" means a person who files a claim under this subsection.

SB40,1039,11 3. "Motor vehicle fuel" has the meaning given in s. 78.005 (13).

SB40,1039,18 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2007, and before January 1, 2018, a claimant may claim as a credit against the taxes imposed under s. 71.43, up to the amount of the taxes, an amount that is equal to 25 percent of the amount that the claimant paid in the taxable year to install or retrofit pumps located in this state that dispense motor vehicle fuel consisting of at least 85 percent ethanol or at least 20 percent biodiesel fuel.

SB40,1039,22 (c) Limitations. 1. The maximum amount of the credit that a claimant may claim under this subsection in a taxable year is an amount that is equal to $5,000 per installed or retrofitted pump that is used as the basis for the credit claimed under par. (b).

SB40,1040,5 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 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.

SB40,1040,7 (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.

SB40, s. 2117 Section 2117. 71.49 (1) (dd) of the statutes is created to read:

SB40,1040,10 71.49 (1) (dd) Dairy manufacturing facility investment credit under s. 71.47 (3p).

SB40, s. 2118 Section 2118. 71.49 (1) (ds) of the statutes is created to read:

SB40,1040,12 71.49 (1) (ds) Ethanol and biodiesel fuel pump credit under s. 71.47 (5j).

SB40, s. 2119 Section 2119. 71.49 (1) (epa) of the statutes is created to read:

SB40,1040,14 71.49 (1) (epa) Electronic medical records credit under s. 71.47 (5i).

SB40, s. 2120 Section 2120. 71.49 (1) (epp) of the statutes is renumbered 71.49 (1) (eps) and amended to read:

SB40,1040,17 71.49 (1) (eps) Film production services credit under s. 71.47 (5f) (b) 1. and 3.

SB40, s. 2121 Section 2121. 71.49 (1) (f) of the statutes is amended to read:

SB40,1040,22 71.49 (1) (f) The total of farmers' drought property tax credit under s. 71.47 (1fd), farmland preservation credit under subch. IX, farmland tax relief credit under s. 71.47 (2m), enterprise zone jobs credit under s. 71.47 (3w), film production services credit under s. 71.28 (5f) (b) 2., and estimated tax payments under s. 71.48.

SB40, s. 2122 Section 2122. 71.54 (2m) of the statutes is created to read:

SB40,1041,10 71.54 (2m) Indexing for inflation; 2008 and thereafter. (a) For taxable years beginning after December 31, 2007, the dollar amount for the maximum household income under sub. (1) (f) 3. shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 2006, as determined by the federal department of labor. The amount that is revised under this paragraph shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this paragraph and incorporate the changes into the income tax forms and instructions.

SB40,1041,16 (b) The department of revenue shall annually adjust the slope under sub. (1) (f) 2. such that as a claimant's income increases from the threshold income under sub. (1) (f) 1. and 2., to an amount that exceeds the maximum household income as calculated under par. (a), the credit that may be claimed is reduced to $0 and the department of revenue shall incorporate the changes into the income tax forms and instructions.

SB40, s. 2123 Section 2123. 71.60 (1) (b) of the statutes is amended to read:

SB40,1042,2 71.60 (1) (b) The credit allowed under this subchapter shall be limited to 90% of the first $2,000 of excessive property taxes plus 70% of the 2nd $2,000 of excessive property taxes plus 50% of the 3rd $2,000 of excessive property taxes. The maximum credit shall not exceed $4,200 for any claimant. The credit for any claimant shall be the greater of either the credit as calculated under this subchapter as it exists at the end of the year for which the claim is filed or as it existed on the date on which the farmland became subject to a current agreement under subch. II or III of ch. 91 or under subch. III of ch. 91, 2005 stats., using for such calculations household income and property taxes accrued of the year for which the claim is filed.

SB40, s. 2124 Section 2124. 71.60 (1) (c) 3. of the statutes is amended to read:

SB40,1042,17 71.60 (1) (c) 3. If the claimant or any member of the claimant's household owns farmland which is ineligible for credit under subd. 1. or 2. but was subject to a farmland preservation agreement under subch. III of ch. 91, 2005 stats., on July 1 of the year for which credit is claimed, or the owner had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, and if the owner has applied by the end of the year in which conversion under s. 91.41, 2005 stats., is first possible for conversion of the agreement to a transition area agreement under subch. II of ch. 91, and the transition area agreement has subsequently been executed, and the farmland is located in a city or village which has a certified exclusive agricultural use zoning ordinance under subch. V of ch. 91 in effect at the close of the year for which credit is claimed, or in a town which is subject to a certified county exclusive agricultural use zoning ordinance under subch. V of ch. 91 in effect at the close of the year for which credit is claimed, the amount of the claim shall be that specified in par. (b).

SB40, s. 2125 Section 2125. 71.60 (1) (c) 5. of the statutes is amended to read:

SB40,1043,3 71.60 (1) (c) 5. If the claimant or any member of the claimant's household owns farmland which is ineligible for credit under subds. 1. to 4. but was subject to a farmland preservation agreement under subch. III of ch. 91, 2005 stats., on July 1 of the year for which credit is claimed, or the owner had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, and if the owner has applied by the end of the year in which conversion under s. 91.41, 2005 stats., is first possible for conversion of the agreement to an agreement under subch. II of ch. 91, and the agreement under subch. II of ch. 91 has subsequently been executed, the amount of the claim shall be limited to 80% of that specified in par. (b).

SB40, s. 2126 Section 2126. 71.60 (1) (c) 8. of the statutes is amended to read:

SB40,1043,9 71.60 (1) (c) 8. If the farmland is subject to a farmland preservation agreement under subch. III of ch. 91, 2005 stats., on July 1 of the year for which credit is claimed or the claimant had applied for such an agreement before July 1 of such year and the agreement has subsequently been executed, the amount of the claim shall be limited to 50% of that specified in par. (b).

SB40, s. 2127 Section 2127. 71.738 (1d) of the statutes is repealed.

SB40, s. 2128 Section 2128. 71.738 (2d) of the statutes is repealed.

SB40, s. 2129 Section 2129. 71.74 (14) of the statutes is amended to read:

SB40,1044,3 71.74 (14) Additional remedy to collect tax. The department may also proceed under s. 71.91 (5) for the collection of any additional assessment of income or franchise taxes or surtaxes, after notice thereof has been given under sub. (11) and before the same shall have become delinquent, when it has reasonable grounds to believe that the collection of such additional assessment will be jeopardized by delay. In such cases notice of the intention to so proceed shall be given by registered mail to the taxpayer, and the warrant of the department shall not issue if the taxpayer within 10 days after such notice furnishes a bond in such amount, not exceeding double the amount of the tax, and with such sureties as the department shall approve, conditioned upon the payment of so much of the additional taxes as shall finally be determined to be due, together with interest thereon as provided by s. 71.82 (1) (a). Nothing in this subsection shall affect the review of additional assessments provided by ss. 71.88 (1) (a) and (2) (a), 71.89 (2), 73.01, and 73.015, and any amounts collected under this subsection shall be deposited with the secretary of administration department and disbursed after final determination of the taxes as are amounts deposited under s. 71.90 (2).

SB40, s. 2130 Section 2130. 71.765 of the statutes is repealed.

SB40, s. 2131 Section 2131. 71.775 (3) (a) 2. of the statutes is amended to read:

SB40,1044,9 71.775 (3) (a) 2. The partner, member, shareholder, or beneficiary has no Wisconsin income other than his or her partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state and his or her share of such income is less than $1,000.

SB40, s. 2132 Section 2132. 71.775 (3) (a) 3. of the statutes is created to read:

SB40,1044,18 71.775 (3) (a) 3. The nonresident partner, member, shareholder, or beneficiary files an affidavit with the department, in the form and manner prescribed by the department, whereby the nonresident partner, member, shareholder, or beneficiary agrees to file a Wisconsin income or franchise tax return and be subject to the personal jurisdiction of the department, the tax appeals commission, and the courts of this state for the purpose of determining and collecting Wisconsin income and franchise taxes, including estimated tax payments, together with any related interest and penalties.

SB40, s. 2133 Section 2133. 71.775 (4) (b) 2. of the statutes is amended to read:

SB40,1045,5 71.775 (4) (b) 2. A pass-through entity that pays the tax withheld under sub. (2) as provided under subd. 1. is not subject to an underpayment of estimated tax under s. 71.09 or 71.29, if 90 percent of the tax that is due for the current taxable year is paid by the unextended due date or if 100 percent of the tax that is due for the taxable year immediately preceding the current taxable year is paid by the unextended due date and the taxable year immediately preceding the current taxable year was a 12-month period. Interest at the rate of 12 percent shall be imposed on the unpaid amount of the tax withheld due under sub. (2) during any extension period and interest at the rate of 18 percent shall be imposed on the unpaid amount of the tax withheld due under sub. (2) for the period beginning with the extended due date and ending with the date that the unpaid amount is paid in full.

SB40, s. 2134 Section 2134. 71.775 (4) (d) of the statutes is amended to read:

SB40,1045,15 71.775 (4) (d) A nonresident partner, member, shareholder, or beneficiary of a pass-through entity may claim a credit, as prescribed by the department, on his or her Wisconsin income or franchise tax return for the amount withheld under sub. (2) on his or her behalf for the tax period for which the income of the pass-through entity is reported. For purposes of this paragraph determining whether interest under s. 71.84 applies to a nonresident partner, member, shareholder, or beneficiary, the amount withheld under sub. (2) is considered to be paid on the last day of the pass-through entity's taxable year for which the tax is paid in 4 equal quarterly installments.

SB40, s. 2135 Section 2135. 71.775 (4) (f) of the statutes is amended to read:

SB40,1045,23 71.775 (4) (f) If a pass-through entity subject to withholding under this section fails to withhold pay the tax as required by this section, the pass-through entity shall be liable for any tax, interest, and penalties. If a nonresident partner, member, shareholder, or beneficiary of the pass-through entity files a return and pays the tax due, the pass-through entity shall not be liable for the tax, but shall be liable for any interest and penalties otherwise applicable for failure to withhold, as the penalty provided under ss. 71.82 (2) (d) and s. 71.83 (1) (a) 1.

SB40, s. 2136 Section 2136. 71.80 (20) of the statutes is amended to read:

SB40,1046,6 71.80 (20) Magnetic media Electronic filing. If the internal revenue service requires a person to file information returns or wage statements on magnetic media or in other machine-readable form electronically for federal income tax purposes, the person shall also file the comparable state information returns or wage statements on magnetic media or in other machine-readable form electronically with the department of revenue for income or franchise tax purposes.

SB40, s. 2137 Section 2137. 71.805 of the statutes is created to read:

SB40,1046,9 71.805 Tax avoidance transactions voluntary compliance program. (1) Definitions. In this section:

SB40,1046,14 (a) "Tax avoidance transaction" means a transaction, plan, or arrangement devised for the principal purpose of avoiding federal or Wisconsin income or franchise tax and that is a reportable transaction as provided under U.S. department of the treasury regulations as of the effective date of this paragraph .... [revisor inserts date].

SB40,1046,17 (b) "Taxpayer" means a person who is subject to the taxes imposed under this chapter and who has a tax liability attributable to using a tax avoidance transaction for any taxable year beginning before January 1, 2007.

SB40,1046,19 (2) Penalty waiver or abatement. All of the following apply with regard to a taxpayer who satisfies the conditions under sub. (3):

SB40,1046,23 (a) Except as provided under sub. (4) (b), the department shall waive or abate all penalties that are applicable to the underreporting or underpayment of Wisconsin income or franchise taxes attributable to using a tax avoidance transaction for any taxable year for which the taxpayer satisfies the conditions under sub. (3).

SB40,1047,3 (b) The department shall not seek a criminal prosecution against the taxpayer with respect to using a tax avoidance transaction for any taxable year for which the taxpayer satisfies the conditions under sub. (3).

SB40,1047,6 (3) Taxpayer eligibility. A taxpayer is eligible for the benefits described under sub. (2) (a) and (b), if, during the period beginning on October 1, 2007, and ending on December 31, 2007, the taxpayer does the following:

SB40,1047,12 (a) Files an amended Wisconsin tax return for each taxable year for which the taxpayer has previously filed a Wisconsin tax return that uses a tax avoidance transaction to underreport the taxpayer's Wisconsin income or franchise tax liability and the amended return reports the total Wisconsin net income and tax for the taxable year, computed without regard to any tax avoidance transaction and without regard to any other adjustment that is unrelated to any tax avoidance transaction.

SB40,1047,15 (b) Pays, in full, for each taxable year for which an amended return is filed under par. (a), the entire amount of Wisconsin income or franchise tax and interest due that is attributable to using a tax avoidance transaction.

SB40,1047,19 (4) Limitations and administration. (a) A taxpayer who receives the benefits described under sub. (2) may not file an appeal or a claim for credit or refund with respect to the tax avoidance transactions for the taxable years for which the taxpayer satisfied the conditions under sub. (3).

SB40,1047,23 (b) The department may not waive or abate a penalty as provided under sub. (2) (a) if the penalty relates to an amount of Wisconsin income and franchise tax that is attributable to a tax avoidance transaction and assessed or paid prior to October 1, 2007, or after December 31, 2007.

SB40,1048,2 (c) Notwithstanding the other provisions of this section, a transaction does not have to be a reportable transaction as provided under U.S. department of the treasury regulations in order for the department to examine the transaction with regard to its principal purpose.

SB40,1048,5 (d) A taxpayer who files an amended return under sub. (3) (a) may file a separate amended return with respect to adjustments that are unrelated to any tax avoidance transaction.

SB40,1048,7 (e) The department shall promulgate rules, publish forms and instructions, and take any other action necessary to implement and administer this section.

SB40, s. 2138 Section 2138. 71.81 of the statutes is created to read:

SB40,1048,9 71.81 Disclosing reportable transactions. (1) Definitions. In this section:

SB40,1048,15 (a) "Listed transaction" means any reportable transaction that is the same as, or substantially similar to, a transaction, plan, or arrangement specifically identified by the U.S. secretary of the treasury as a listed transaction, for purposes of section 6011 of the Internal Revenue Code, that occurred on or after January 1, 2002, and that is specifically identified by the U.S. secretary of the treasury as a listed transaction on or after the date the transaction occurred.

SB40,1048,20 (b) "Material advisor" means any person who provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction and who, directly or indirectly, derives gross income from providing such aid, assistance, or advice in an amount that exceeds the threshold amount.

SB40,1048,25 (c) "Reportable transaction" means any transaction, plan, or arrangement, including a listed transaction, for which a taxpayer is required to submit information to the department because the taxpayer is required to disclose the transaction, plan, or arrangement for federal income tax purposes, as provided under U.S. department of treasury regulations.

SB40,1049,3 (d) "Tax shelter" means any entity, plan, or arrangement, if avoiding or evading federal income tax or Wisconsin income or franchise tax is a significant purpose of the entity, plan, or arrangement.

SB40,1049,4 (e) "Threshold amount" means the following:

SB40,1049,7 1. In the case of a reportable transaction, not including a listed transaction, from which a substantial part of the tax benefits are provided to an individual, $50,000.

SB40,1049,9 2. In the case of a listed transaction from which a substantial part of the tax benefits are provided to an individual, $10,000.

SB40,1049,12 3. In the case of a reportable transaction, not including a listed transaction, from which a substantial part of the tax benefits are provided to an entity and not an individual, $250,000.

SB40,1049,14 4. In the case of a listed transaction, from which a substantial part of the tax benefits are provided to an entity and not an individual, $25,000.

SB40,1050,4 (2) Disclosure. For each taxable year in which a taxpayer has participated in a reportable transaction, the taxpayer shall file with the department a copy of any form prescribed by the internal revenue service for disclosing a reportable transaction for federal income tax purposes no later than 60 days after the date for which the taxpayer is required to file the form for federal income tax purposes, except that, if the taxpayer has filed a form with the internal revenue service on or before the effective date of this subsection .... [revisor inserts date], the taxpayer shall file a copy of the form with the department no later than December 31, 2007. The department may require that forms filed with the department under this subsection be filed separately from this state's income or franchise tax return. This subsection applies to any reportable transaction entered into on or after January 1, 2002, for any taxable year for which the transaction remains undisclosed and for which the statute of limitations on assessment, including any extension provided under sub. (6), has not expired as of the date that is 60 days after the effective date of this subsection .... [revisor inserts date].

SB40,1050,7 (3) Penalty for failing to disclose. (a) Any taxpayer who does not file the form under sub. (2) and who is required to file the form is subject to the following penalty:

SB40,1050,10 1. If the taxpayer participated in a reportable transaction that is not a listed transaction, the lesser of $15,000 or 10 percent of the tax benefit obtained from the reportable transaction.

SB40,1050,11 2. If the taxpayer participated in a listed transaction, $30,000.

SB40,1050,15 (b) The secretary of revenue may waive or abate any penalty imposed under this subsection, or any portion of such penalty, related to a reportable transaction that is not a listed transaction, if the waiver or abatement promotes compliance with this section and effective tax administration.