LRB-0033/2
JK:nwn&cjs:rs
2009 - 2010 LEGISLATURE
February 5, 2009 - Introduced by Representatives Shilling, Richards, Davis, Roys,
Strachota, Molepske Jr., Ballweg, Roth, Barca, Petrowski, Vruwink,
Nygren, Spanbauer, Berceau, Stone, Suder, Gunderson
and A. Ott,
cosponsored by Senators Lassa, Lehman, Hopper, Risser, Harsdorf, Coggs,
Erpenbach, Schultz, Hansen, Kedzie
and Plale. Referred to Committee on
Jobs, the Economy and Small Business.
AB18,1,5 1An Act to amend 44.02 (24), 71.07 (9m) (c), 71.07 (9m) (f), 71.28 (6) (c), 71.28 (6)
2(f), 71.47 (6) (c) and 71.47 (6) (f); and to create 71.07 (9m) (cm), 71.07 (9m) (g),
371.28 (6) (cm), 71.28 (6) (g), 71.47 (6) (cm) and 71.47 (6) (g) of the statutes;
4relating to: the income and franchise tax credit that supplements the federal
5historic rehabilitation tax credit.
Analysis by the Legislative Reference Bureau
Under current law, a person who owns an income-producing historic building
may claim a federal income tax credit that is equal to 20 percent of certain costs to
rehabilitate the historic building. To claim the credit, the building must be listed,
or be eligible for listing, on the national register of historic places or located in certain
national, state, or local historic districts, and the rehabilitation work must comply
with standards established by the secretary of the interior.
Under current law, a person who may claim the federal income tax credit for
rehabilitating an income-producing historic building may also claim a state income
tax or franchise tax credit that is equal to 5 percent of certain costs to rehabilitate
the historic building. To claim the credit, the person must include with the person's
tax return evidence that the secretary of the interior approved the rehabilitation
work before the rehabilitation work began.
Under this bill, a person may claim the state income and franchise tax credit
for rehabilitating an income-producing historic building if the person includes with
the person's tax return evidence that the state historic preservation officer

recommended the rehabilitation work for approval by the secretary of the interior
before the rehabilitation work began and that the rehabilitation was approved by the
secretary of the interior.
Under current law, each partner in a partnership or member of a limited
liability company is allocated a portion of any tax credit that the partnership or
limited liability company may claim, including the credit for rehabilitating a historic
building, based on each partner's or member's ownership interest. Under this bill,
a partner or member is allocated a portion of the tax credit for rehabilitating a
historic building in a manner specified in an agreement with the other partners or
members.
For further information see the state and local 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:
AB18, s. 1 1Section 1. 44.02 (24) of the statutes is amended to read:
AB18,2,62 44.02 (24) Promulgate by rule procedures, standards and forms necessary to
3certify, and shall certify, expenditures for preservation or rehabilitation of historic
4property for the purposes of s. ss. 71.07 (9m) and (9r), 71.28 (6), and 71.47 (6). These
5standards shall be substantially similar to the standards used by the secretary of the
6interior to certify rehabilitations under 26 USC 47 (c) (2).
AB18, s. 2 7Section 2 . 71.07 (9m) (c) of the statutes is amended to read:
AB18,2,138 71.07 (9m) (c) No person may claim the credit under this subsection unless the
9claimant includes with the claimant's return evidence that the rehabilitation was
10approved recommended by the state historic preservation officer for approval by the
11secretary of the interior under 36 CFR 67.6 before the physical work of construction,
12or destruction in preparation for construction, began and that the rehabilitation was
13approved by the secretary of the interior under 36 CFR 67.6
.
AB18, s. 3 14Section 3. 71.07 (9m) (cm) of the statutes is created to read:
AB18,3,2
171.07 (9m) (cm) Any credit claimed under this subsection for Wisconsin
2purposes shall be claimed at the same time as for federal purposes.
AB18, s. 4 3Section 4. 71.07 (9m) (f) of the statutes is amended to read:
AB18,3,224 71.07 (9m) (f) A partnership, limited liability company , or tax-option
5corporation may not claim the credit under this subsection. The individual partners
6of a partnership, members in of a limited liability company, or shareholders in a
7tax-option corporation may claim the credit under this subsection based on eligible
8costs incurred by the partnership, company, or tax-option corporation, in proportion
9to the ownership interest of each partner, member or shareholder
. The partnership,
10limited liability company, or tax-option corporation shall calculate the amount of the
11credit which may be claimed by each partner, member, or shareholder and shall
12provide that information to the partner, member, or shareholder. For shareholders
13of a tax-option corporation, the credit may be allocated in proportion to the
14ownership interest of each shareholder. Credits computed by a partnership or
15limited liability company shall be allocated to partners or members as provided in
16a written agreement among the partners or members that is entered into no later
17than the last day of the taxable year of the partnership or limited liability company,
18for which the credit is claimed. Any partner or member who claims the credit as
19provided under this paragraph, for which the credit is claimed shall attach a copy of
20the agreement to the tax return on which the credit is claimed. A person claiming
21the credit as provided under this paragraph is solely responsible for any tax liability
22arising from a dispute with the department of revenue related to claiming the credit.
AB18, s. 5 23Section 5. 71.07 (9m) (g) of the statutes is created to read:
AB18,4,224 71.07 (9m) (g) 1. If a person who claims the credit under this subsection elects
25to claim the credit based on claiming amounts for expenditures as the expenditures

1are paid, rather than when the rehabilitation work is completed, the person shall file
2an election form with the department, in the manner prescribed by the department.
AB18,4,73 2. Notwithstanding s. 71.77, the department may adjust or disallow the credit
4claimed under this subsection within 4 years after the date that the state historical
5society notifies the department that the expenditures for which the credit was
6claimed do not comply with the standards for certification promulgated under s.
744.02 (24).
AB18, s. 6 8Section 6 . 71.28 (6) (c) of the statutes is amended to read:
AB18,4,149 71.28 (6) (c) No person may claim the credit under this subsection unless the
10claimant includes with the claimant's return evidence that the rehabilitation was
11approved recommended by the state historic preservation officer for approval by the
12secretary of the interior under 36 CFR 67.6 before the physical work of construction,
13or destruction in preparation for construction, began and that the rehabilitation was
14approved by the secretary of the interior under 36 CFR 67.6
.
AB18, s. 7 15Section 7. 71.28 (6) (cm) of the statutes is created to read:
AB18,4,1716 71.28 (6) (cm) Any credit claimed under this subsection for Wisconsin purposes
17shall be claimed at the same time as for federal purposes.
AB18, s. 8 18Section 8. 71.28 (6) (f) of the statutes is amended to read:
AB18,5,1219 71.28 (6) (f) A partnership, limited liability company , or tax-option corporation
20may not claim the credit under this section subsection. The individual partners of
21a partnership
, members of a limited liability company, or shareholders in a
22tax-option corporation may claim the credit under this subsection based on eligible
23costs incurred by the partnership, limited liability company, or tax-option
24corporation, in proportion to the ownership interest of each partner, member or
25shareholder. The partnership, limited liability company, or tax-option corporation

1shall calculate the amount of the credit which may be claimed by each partner,
2member, or shareholder and shall provide that information to the partner, member,
3or shareholder. For shareholders of a tax-option corporation, the credit may be
4allocated in proportion to the ownership interest of each shareholder. Credits
5computed by a partnership or limited liability company shall be allocated to partners
6or members as provided in a written agreement among the partners or members that
7is entered into no later than the last day of the taxable year of the partnership or
8limited liability company, for which the credit is claimed. Any partner or member
9who claims the credit as provided under this paragraph shall attach a copy of the
10agreement to the tax return on which the credit is claimed. A person claiming the
11credit as provided under this paragraph is solely responsible for any tax liability
12arising from a dispute with the department of revenue related to claiming the credit.
AB18, s. 9 13Section 9. 71.28 (6) (g) of the statutes is created to read:
AB18,5,1714 71.28 (6) (g) 1. If a person who claims the credit under this subsection elects
15to claim the credit based on claiming amounts for expenditures as the expenditures
16are paid, rather than when the rehabilitation work is completed, the person shall file
17an election form with the department, in the manner prescribed by the department.
AB18,5,2218 2. Notwithstanding s. 71.77, the department may adjust or disallow the credit
19claimed under this subsection within 4 years after the date that the state historical
20society notifies the department that the expenditures for which the credit was
21claimed do not comply with the standards for certification promulgated under s.
2244.02 (24).
AB18, s. 10 23Section 10 . 71.47 (6) (c) of the statutes is amended to read:
AB18,6,424 71.47 (6) (c) No person may claim the credit under this subsection unless the
25claimant includes with the claimant's return evidence that the rehabilitation was

1approved recommended by the state historic preservation officer for approval by the
2secretary of the interior under 36 CFR 67.6 before the physical work of construction,
3or destruction in preparation for construction, began and that the rehabilitation was
4approved by the secretary of the interior under 36 CFR 67.6
.
AB18, s. 11 5Section 11. 71.47 (6) (cm) of the statutes is created to read:
AB18,6,76 71.47 (6) (cm) Any credit claimed under this subsection for Wisconsin purposes
7shall be claimed at the same time as for federal purposes.
AB18, s. 12 8Section 12. 71.47 (6) (f) of the statutes is amended to read:
AB18,7,29 71.47 (6) (f) A partnership, limited liability company , or tax-option corporation
10may not claim the credit under this subsection. The individual partners of a
11partnership
, members of a limited liability company, or shareholders in a tax-option
12corporation may claim the credit under this subsection based on eligible costs
13incurred by the partnership, limited liability company, or tax-option corporation, in
14proportion to the ownership interest of each partner, member or shareholder
. The
15partnership, limited liability company, or tax-option corporation shall calculate the
16amount of the credit which may be claimed by each partner, member, or shareholder
17and shall provide that information to the partner, member, or shareholder. For
18shareholders of a tax-option corporation, the credit may be allocated in proportion
19to the ownership interest of each shareholder. Credits computed by a partnership
20or limited liability company shall be allocated to partners or members as provided
21in a written agreement among the partners or members that is entered into no later
22than the last day of the taxable year of the partnership or limited liability company,
23for which the credit is claimed. Any partner or member who claims the credit as
24provided under this paragraph shall attach a copy of the agreement to the tax return
25on which the credit is claimed. A person claiming the credit as provided under this

1paragraph is solely responsible for any tax liability arising from a dispute with the
2department of revenue related to claiming the credit.
AB18, s. 13 3Section 13. 71.47 (6) (g) of the statutes is created to read:
AB18,7,74 71.47 (6) (g) 1. If a person who claims the credit under this subsection elects
5to claim the credit based on claiming amounts for expenditures as the expenditures
6are paid, rather than when the rehabilitation work is completed, the person shall file
7an election form with the department, in the manner prescribed by the department.
AB18,7,128 2. Notwithstanding s. 71.77, the department may adjust or disallow the credit
9claimed under this subsection within 4 years after the date that the state historical
10society notifies the department that the expenditures for which the credit was
11claimed do not comply with the standards for certification promulgated under s.
1244.02 (24).
AB18, s. 14 13Section 14. Initial applicability.
AB18,7,1514 (1) Supplement to federal historic rehabilitation credit. This act first
15applies to property placed in service on or after June 30, 2008.
AB18,7,1616 (End)
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