SB62: Bill Text

SB62,51,23 3. a. The maximum amount of the credits that may be allocated under this subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2009-10 is $300,000, as allocated under s. 560.208.

SB62,52,3 b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2010-11, and in each fiscal year thereafter, is $700,000, as allocated under s. 560.208.

SB62,52,12 4. 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 expenses under par. (b), except that the aggregate amount of credits that the entity may compute shall not exceed $200,000. 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.

SB62,52,16 5. If 2 or more persons own and operate the meat processing operation, each person may claim a credit under par. (b) in proportion to his or her ownership interest, except that the aggregate amount of the credits claimed by all persons who own and operate the meat processing operation shall not exceed $200,000.

SB62,52,19 6. No credit may be allowed under this subsection unless the claimant submits with the claimant's return a copy of the claimant's credit certification and allocation under s. 560.208.

SB62,52,21 (d) Administration. 1. Section 71.28 (4) (e), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB62,53,2 2. If the allowable amount of the claim under par. (b) exceeds the tax otherwise due under s. 71.02 or 71.08, the amount of the claim not used to offset the tax due shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (bd).

SB62, s. 101 Section 101. 71.07 (5b) (c) 1. of the statutes is repealed.

SB62, s. 102 Section 102. 71.07 (5b) (c) 2. of the statutes is renumbered 71.07 (5b) (c).

SB62, s. 103 Section 103. 71.07 (5d) (b) of the statutes is renumbered 71.07 (5d) (b) (intro.) and amended to read:

SB62,53,9 71.07 (5d) (b) Filing claims. (intro.) Subject to the limitations provided in this subsection and in s. 560.205, a claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08, up to the amount of those taxes, the following:

SB62,53,13 1. For taxable years beginning before January 1, 2008, in each taxable year for 2 consecutive years, beginning with the taxable year as certified by the department of commerce, an amount equal to 12.5 percent of the claimant's bona fide angel investment made directly in a qualified new business venture.

SB62, s. 104 Section 104. 71.07 (5d) (b) 2. of the statutes is created to read:

SB62,53,18 71.07 (5d) (b) 2. For taxable years beginning after December 31, 2007, for the taxable year certified by the department of commerce, an amount equal to 25 percent of the claimant's bona fide angel investment made directly in a qualified new business venture.

SB62, s. 105 Section 105. 71.07 (5d) (c) 2. of the statutes is amended to read:

SB62,53,23 71.07 (5d) (c) 2. The For taxable years beginning before January 1, 2008, the maximum amount of a claimant's investment that may be used as the basis for a credit under this subsection is $2,000,000 for each investment made directly in a business certified under s. 560.205 (1).

SB62, s. 106 Section 106. 71.07 (5e) (b) of the statutes is amended to read:

SB62,54,8 71.07 (5e) (b) Filing claims. Subject to the limitations provided in this subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first taxable year following the taxable year in which the claimant claims an exemption a deduction under s. 77.54 (48) 77.585 (9), 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, in each taxable year for 2 years, the amount of sales and use tax certified by the department of commerce that resulted from the claimant claimed as an exemption claiming a deduction under s. 77.54 (48) 77.585 (9).

SB62, s. 107 Section 107. 71.07 (5e) (c) 1. of the statutes is amended to read:

SB62,54,11 71.07 (5e) (c) 1. No credit may be allowed under this subsection unless the claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).

SB62, s. 108 Section 108. 71.07 (5e) (c) 3. of the statutes is amended to read:

SB62,54,16 71.07 (5e) (c) 3. The total amount of the credits and exemptions the sales and use tax resulting from the deductions claimed under s. 77.585 (9) that may be claimed by all claimants under this subsection and ss. 71.28 (5e), 71.47 (5e), and 77.54 (48) 77.585 (9) is $7,500,000, as determined by the department of commerce.

SB62, s. 109 Section 109. 71.08 (1) (intro.) of the statutes is amended to read:

SB62,55,2 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust, or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (2fd), (3m), (3n), (3p), (3r), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (6), (6e), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w), and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w), and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:

SB62, s. 110 Section 110. 71.10 (1) of the statutes is amended to read:

SB62,55,15 71.10 (1) Allocation of gross income, deductions, credits between 2 or more businesses. In any case of 2 or more organizations, trades or businesses (whether or not incorporated, whether or not organized in the United States and, whether or not affiliated, and whether or not unitary) owned or controlled directly or indirectly by the same interests, the secretary or the secretary's delegate may distribute, apportion or allocate gross income, deductions, credits or allowances between or among such organizations, trades or businesses, if the secretary determines that such distribution, apportionment or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades or businesses. The authority granted under this subsection is in addition to, and not a limitation of or dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45., 71.26 (2) (a) 7. and 8., 71.34 (1k) (j) and (k), 71.45 (2) (a) 16. and 17., and 71.80 (23).

SB62, s. 111 Section 111. 71.10 (1m) of the statutes is created to read:

SB62,55,23 71.10 (1m) Transactions without economic substance. (a) If any person, directly or indirectly, engages in a transaction or series of transactions without economic substance to create a loss or to reduce taxable income or to increase credits allowed in determining Wisconsin tax, the department shall determine the amount of a taxpayer's taxable income or tax so as to reflect what would have been the taxpayer's taxable income or tax if not for the transaction or transactions without economic substance causing the reduction in taxable income or tax.

SB62,55,25 (b) A transaction has economic substance only if the taxpayer shows all of the following:

SB62,56,2 1. The transaction changes the taxpayer's economic position in a meaningful way, apart from federal, state, local, and foreign tax effects.

SB62,56,6 2. The taxpayer has a substantial nontax purpose for entering into the transaction and the transaction is a reasonable means of accomplishing the substantial nontax purpose. A transaction has a substantial nontax purpose if it has substantial potential for profit, disregarding any tax effects.

SB62,56,12 (c) With respect to transactions between members of a controlled group as defined in section 267 (f) (1) of the Internal Revenue Code, such transactions shall be presumed to lack economic substance and the taxpayer shall bear the burden of establishing by clear and convincing evidence that a transaction or a series of transactions between the taxpayer and one or more members of the controlled group has economic substance.

SB62, s. 112 Section 112. 71.10 (4) (gv) of the statutes is created to read:

SB62,56,14 71.10 (4) (gv) Economic development tax credit under s. 71.07 (2dy).

SB62, s. 113 Section 113. 71.10 (4) (i) of the statutes is amended to read:

SB62,56,24 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under subch. IX, homestead credit under subch. VIII, farmland tax relief credit under s. 71.07 (3m), farmers' drought property tax credit under s. 71.07 (2fd), dairy manufacturing facility investment credit under s. 71.07 (3p), meat processing facility investment credit under s. 71.07 (3r), film production services credit under s. 71.07 (5f) (b) 2., veterans and surviving spouses property tax credit under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), earned income tax credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld under subch. X.

SB62, s. 114 Section 114. 71.21 (4) of the statutes is amended to read:

SB62,57,4 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), and (5k) and passed through to partners shall be added to the partnership's income.

SB62, s. 115 Section 115. 71.22 (1g) of the statutes is amended to read:

SB62,57,11 71.22 (1g) For purposes of s. 71.25 (9) (df) and, (dh), (dj), and (dk), "commercial domicile" means the location from which a trade or business is principally managed and directed, based on any factors the department determines are appropriate, including the location where the greatest number of employees of the trade or business work, have their office or base of operations, or from which the employees are directed or controlled.

SB62, s. 116 Section 116. 71.22 (1r) of the statutes is amended to read:

SB62,58,2 71.22 (1r) "Doing business in this state" includes issuing credit, debit, or travel and entertainment cards to customers in this state; regularly selling products or services of any kind or nature to customers in this state that receive the product or service in this state; regularly soliciting business from potential customers in this state; regularly performing services outside this state for which the benefits are received in this state; regularly engaging in transactions with customers in this state that involve intangible property and result in receipts flowing to the taxpayer from within this state; holding loans secured by real or tangible personal property located in this state; owning, directly or indirectly, a general or limited partnership interest in a partnership that does business in this state, regardless of the percentage of ownership; and owning, directly or indirectly, an interest in a limited liability company that does business in this state, regardless of the percentage of ownership, if the limited liability company is treated as a partnership for federal income tax purposes.

SB62, s. 117 Section 117. 71.22 (1t) of the statutes is amended to read:

SB62,58,8 71.22 (1t) For purposes of s. 71.25 (9) (df) and, (dh), (dj), and (dk), "domicile" means an individual's true, fixed, and permanent home where the individual intends to remain permanently and indefinitely and to which, whenever absent, the individual intends to return, except that no individual may have more than one domicile at any time.

SB62, s. 118 Section 118. 71.22 (3g) of the statutes is created to read:

SB62,58,13 71.22 (3g) For purposes of ss. 71.26 (2) (a) 7. and 9. and 71.255 (2) (d) 1., "intangible expenses" include the following, to the extent that the amounts would otherwise be deductible in determining net income under the Internal Revenue Code as modified under s. 71.26 (3):

SB62,58,16 (a) Expenses, losses, and costs for, related to, or directly or indirectly in connection with the acquisition, use, maintenance, management, ownership, sale, exchange, or any other disposition of intangible property.

SB62,58,18 (b) Losses related to, or incurred in connection directly or indirectly with, factoring transactions or discounting transactions.

SB62,58,19 (c) Royalty, patent, technical, and copyright fees.

SB62,58,20 (d) Licensing fees.

SB62,58,21 (e) Other similar expenses, losses, and costs.

SB62, s. 119 Section 119. 71.22 (3h) of the statutes is created to read:

SB62,58,25 71.22 (3h) "Intangible property" includes stocks, bonds, financial instruments, patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets.

SB62, s. 120 Section 120. 71.22 (3m) of the statutes is amended to read:

SB62,59,4 71.22 (3m) For purposes of s. ss. 71.26 (2) (a) 7. and 9. and 71.255 (2) (d) 1., "interest expenses" means interest that would otherwise be deductible under section 163 of the Internal Revenue Code, as modified under s. 71.26 (3).

SB62, s. 121 Section 121. 71.22 (6d) of the statutes is created to read:

SB62,59,12 71.22 (6d) For purposes of s. 71.26 (2) (a) 7. and 9., "management fees" include expenses and costs, not including interest expenses, pertaining to accounts receivable, accounts payable, employee benefit plans, insurance, legal matters, payroll, data processing, purchasing, taxation, financial matters, securities, accounting, or reporting and compliance matters or similar activities, to the extent that the amounts would otherwise be deductible in determining net income under the Internal Revenue Code as modified by s. 71.26 (3).

SB62, s. 122 Section 122. 71.22 (9g) of the statutes is amended to read:

SB62,59,17 71.22 (9g) For purposes of s. 71.25 (9) (df) and, (dh), (dj), and (dk), "state" means a state of the United States, the District of Columbia, the commonwealth of Puerto Rico, or any territory or possession of the United States, unless the context requires that "state" means only the state of Wisconsin.

SB62, s. 123 Section 123. 71.25 (intro.) of the statutes is amended to read:

SB62,59,21 71.25 Situs of income; allocation and apportionment. (intro.) For purposes of determining the situs of income under this section and s. 71.255 (5) (a) 1. and 2.:

SB62, s. 124 Section 124. 71.25 (5) (b) 1. of the statutes is renumbered 71.25 (5) (b).

SB62, s. 125 Section 125. 71.25 (5) (b) 2. of the statutes is repealed.

SB62, s. 126 Section 126. 71.25 (9) (d) of the statutes is repealed.

SB62, s. 127 Section 127. 71.25 (9) (dj) of the statutes is created to read:

SB62,60,6 71.25 (9) (dj) 1. Except as provided in par. (df), gross royalties and other gross receipts received for the use or license of intangible property, including patents, copyrights, trademarks, trade names, service names, franchises, licenses, plans, specifications, blueprints, processes, techniques, formulas, designs, layouts, patterns, drawings, manuals, technical know-how, contracts, and customer lists, are sales in this state if any of the following applies:

SB62,60,12 a. The purchaser or licensee uses the intangible property in the operation of a trade or business at a location in this state. If the purchaser or licensee uses the intangible property in the operation of a trade or business in more than one state, the gross royalties and other gross receipts from the use of the intangible property shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

SB62,60,14 b. The purchaser or licensee is billed for the purchase or license of the use of the intangible property at a location in this state.

SB62,60,16 c. The purchaser or licensee of the use of the intangible property has its commercial domicile in this state.

SB62,60,21 2. If the taxpayer is not within the jurisdiction, for income or franchise tax purposes, in the state in which the gross royalties or other gross receipts are apportioned under this paragraph, but the taxpayer's commercial domicile is in this state, 50 percent of those gross royalties or other gross receipts shall be included in the numerator of the sales factor.

SB62, s. 128 Section 128. 71.25 (9) (dk) of the statutes is created to read:

SB62,60,24 71.25 (9) (dk) 1. Sales of intangible property, excluding securities, are sales in this state if any of the following applies:

SB62,61,5 a. The purchaser uses the intangible property in the regular course of business operations in this state or for personal use in this state. If the purchaser uses the intangible property in more than one state, the sales shall be divided between those states having jurisdiction to impose an income tax on the taxpayer in proportion to the use of the intangible property in those states.

SB62,61,7 b. The purchaser is billed for the purchase of the intangible property at a location in this state.

SB62,61,9 c. The purchaser of the intangible property has its commercial domicile in this state.

SB62,61,13 2. If the taxpayer is not within the jurisdiction, for income or franchise tax purposes, in the state in which the sales of intangible property are apportioned under this paragraph, but the taxpayer's commercial domicile is in this state, 50 percent of those gross receipts shall be included in the numerator of the sales factor.

SB62, s. 129 Section 129. 71.25 (10) (a) of the statutes is renumbered 71.25 (10) (a) 1.

SB62, s. 130 Section 130. 71.25 (10) (a) 2. of the statutes is created to read:

SB62,61,19 71.25 (10) (a) 2. As used in this section, "financial organization" includes any subsidiary of an entity described in subd. 1., if a significant purpose for the subsidiary is to hold investments or if the subsidiary primarily functions to hold investments.

SB62, s. 131 Section 131. 71.255 of the statutes is created to read:

SB62,61,21 71.255 Combined Reporting. (1) Definitions. In this section:

SB62,61,25 (a) "Combined group" means the group of all persons whose income and apportionment factors are required to be taken into account under sub. (2) to determine a member's share of the net business income or loss apportionable to this state that is attributable to a unitary business.

SB62,62,4 (b) "Combined report" means a report in the form and manner prescribed by the department that specifies a combined group's income from the unitary business, apportionment factors attributable to the unitary business, and any other tax return information prescribed by the department.

SB62,62,5 (c) "Commonly controlled group" means any of the following:

SB62,62,12 1. A parent corporation and any one or more corporations or chains of corporations that are connected to the parent corporation by direct or indirect ownership by the parent corporation, if the parent corporation owns stock representing more than 50 percent of the voting power of at least one of the connected corporations or if the parent corporation or any of the connected corporations owns stock that cumulatively represents more than 50 percent of the voting power of each of the connected corporations.

SB62,62,15 2. Any 2 or more corporations if a common owner, regardless of whether the owner is a corporate entity, directly or indirectly owns stock representing more than 50 percent of the voting power of the corporations or connected corporations.

SB62,62,17 3. Any 2 or more corporations if stock representing more than 50 percent of the voting power in each corporation are interests that cannot be separately transferred.

SB62,62,22 4. Any 2 or more corporations if stock representing more than 50 percent of the voting power in each corporation is directly owned by, or for the benefit of, family members. In this subdivision, "family member" means an individual related by blood, marriage, or adoption within the 3rd degree of kinship, as computed under s. 990.001 (16), or the spouse of such individual.

SB62,62,24 (d) "Consolidated foreign operating corporation" means a corporation that, for the taxable year, satisfies all of the following conditions: