71.07(1)(1)
Claim of right credit. Any natural person may credit against taxes otherwise due under this chapter the decrease in tax under this chapter for the prior taxable year that would be attributable to subtracting income taxed for that year under the claim of right doctrine but repaid, as calculated under section
1341 of the internal revenue code, if the income repaid is greater than $3,000 and the amount is not subtracted in computing Wisconsin adjusted gross income or used in computing the credit under
sub. (5) (a). If the allowable amount of the claim exceeds the claimant's taxes due under this chapter the amount of the claim not used to offset those taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft drawn on the general fund.
71.07(2)
(2) Community development finance authority credit. Any individual receiving a credit under s.
71.09 (12m), 1985 stats., may carry forward to the next succeeding 15 taxable years the amount of the credit not offset against taxes for the year of purchase to the extent not offset by those taxes otherwise due in all intervening years between the year for which the credit was computed and the year for which the carry-forward is claimed.
71.07(2dd)
(2dd) Development zones day care credit. 71.07(2dd)(a)1.
1. "Day care center benefits" means benefits provided at a day care facility that is licensed under
s. 48.65 or
48.69 and that for compensation provides care for at least 6 children or benefits provided at a facility for persons who are physically or mentally incapable of caring for themselves.
71.07(2dd)(a)2.
2. "Employment-related day care expenses" means amounts paid or incurred by a claimant, during the 2-year period beginning with the day that the member of the targeted group begins work for the claimant, for providing or making day care center benefits available to a qualifying individual in order to enable a member of a targeted group to be employed by the claimant.
71.07(2dd)(a)5.
5. "Qualifying individual" means a dependent of a member of a targeted group who is employed by a claimant and with respect to whom the member is entitled to a deduction under section
151 (c) of the internal revenue code for federal income tax purposes, a dependent of a member of a targeted group who is employed by a claimant if the dependent is physically or mentally incapable of caring for himself or herself or the spouse of a member of a targeted group who is employed by the claimant if the spouse is physically or mentally incapable of caring for himself or herself.
71.07(2dd)(b)
(b) Except as provided in
s. 73.03 (35), for any taxable year for which that person is certified under
s. 560.765 (3) and begins business operations in a zone under
s. 560.71 after July 29, 1995, or certified under
s. 560.797 (4) (a) for each zone for which the person is certified or entitled a person may credit against taxes otherwise due under this subchapter employment-related day care expenses, up to $1,200 for each qualifying individual.
71.07(2dd)(dm)
(dm) No credit may be allowed under this subsection unless the claimant includes with the claimant's return a statement from the department of commerce verifying the amount of qualifying employment-related day care expenses.
71.07(2de)
(2de) Development zones environmental remediation credit. 71.07(2de)(a)(a) Except as provided in
s. 73.03 (35), for any taxable year for which a person is certified under
s. 560.765 (3) and begins business operations in a zone under
s. 560.71 after July 29, 1995, or certified under
s. 560.797 (4) (a), for each zone for which the person is certified or entitled the person may claim as a credit against taxes otherwise due under this subchapter an amount equal to 7.5% of the amount that the person expends to remove or contain environmental pollution, as defined in
s. 299.01 (4), in the zone or to restore soil or groundwater that is affected by environmental pollution, as defined in
s. 299.01 (4), in the zone if the person fulfills all of the following requirements:
71.07(2de)(a)1.
1. Begins the work, other than planning and investigating, for which the credit is claimed after the area that includes the site where the work is done is designated a development zone under
s. 560.71 or an enterprise development zone under
s. 560.797 and after the claimant is certified under
s. 560.765 (3) or certified under
s. 560.797 (4) (a).
71.07(2di)
(2di) Development zones investment credit. 71.07(2di)(a)(a) Except as provided in
pars. (dm) and
(f) and
s. 73.03 (35), for any taxable year for which the person is certified under
s. 560.765 (3) for tax benefits, any person may claim as a credit against taxes otherwise due under this chapter 2.5% of the purchase price of depreciable, tangible personal property, or 1.75% of the purchase price of depreciable, tangible personal property that is expensed under section
179 of the internal revenue code for purposes of the taxes under this chapter, except that:
71.07(2di)(a)1.
1. The investment must be in property that is purchased after the person is certified under
s. 560.765 (3) for tax benefits and that is used for at least 50% of its use in the conduct of the business operations for which the claimant is certified under
s. 560.765 (3) at a location in a development zone under
subch. VI of ch. 560 or, if the property is mobile, the base of operations of the property for at least 50% of its use must be a location in a development zone.
71.07(2di)(a)2.
2. The credit under this subsection may be claimed only by the person who purchased the property the investment in which is the basis for the credit, except that only partners may claim the credit based on purchases by a partnership, only members may claim the credit based on purchases by a limited liability company and except that only shareholders may claim the credit based on purchases by a tax-option corporation.
71.07(2di)(a)3.
3. If the credit is claimed for used property, the claimant may not have used the property for business purposes at a location outside the development zone. If the credit is attributable to a partnership, limited liability company or tax-option corporation, that entity may not have used the property for business purposes at a location outside the development zone.
71.07(2di)(a)4.
4. No credit is allowed under this subsection for property which is the basis for a credit under
sub. (2dL).
71.07(2di)(b)1.1. Except as provided in
subd. 2., the credit, including any credits carried over, may be offset only against the amount of the tax otherwise due under this chapter attributable to income from the business operations of the claimant in the development zone and against the tax attributable to income from directly related business operations of the claimant.
71.07(2di)(b)2.
2. If the claimant is located on an Indian reservation, as defined in
s. 560.86 (5), and is an American Indian, as defined in
s. 560.86 (1), an Indian business, as defined in
s. 560.86 (4), or a tribal enterprise, and if the allowable amount of the credit under this subsection exceeds the taxes otherwise due under this chapter on or measured by the claimant's income, the amount of the credit not used as an offset against those taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft. In this subdivision, "tribal enterprise" means a business that is at least 51% owned and controlled by the governing body of one or more Indian tribes, is actively managed by the governing body, or by the designee of the governing body, of one or more Indian tribes and is currently performing a useful business function.
71.07(2di)(b)3.
3. Partnerships, limited liability companies and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or company shall compute the amount of the credit that may be claimed by each of its shareholders, partners or members and shall provide that information to each of its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.
71.07(2di)(c)
(c) Except as provided in
par. (b) 2., the carry-over provisions of
s. 71.28 (4) (e) and
(f) as they relate to the credit under
s. 71.28 (4) relate to the credit under this subsection and apply as if the development zone continued to exist.
71.07(2di)(d)
(d) No credit may be allowed under this subsection unless the claimant includes with the claimant's return:
71.07(2di)(d)2.
2. A statement from the department of commerce verifying the purchase price of the investment and verifying that the investment fulfills the requirements under
par. (a).
71.07(2di)(dm)
(dm) In calculating the credit under
par. (a), a claimant shall reduce the purchase price of the property by a percentage equal to the percentage of use of the property during the taxable year the property is first placed into service that is for a purpose not specified under
par. (a) 1.
71.07(2di)(e)
(e) The recapture provisions under section
47 (a) (5) of the internal revenue code as amended to December 31, 1985, as they apply to the credit under section
46 of the internal revenue code, apply to the credit under this subsection, except that those provisions also apply if the property for which the credit is claimed is moved out of the development zone or, for mobile property, if the base of operations is moved out of the zone and except that the determination of whether or not property is 3-year property shall be made under section
168 of the internal revenue code.
71.07(2di)(f)
(f) If the certification of a person for tax benefits under
s. 560.765 (3) is revoked, that person may claim no credits under this subsection for the taxable year that includes the day on which the certification is revoked or succeeding taxable years and that person may carry over no unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which certification is revoked or succeeding taxable years.
71.07(2di)(g)
(g) If a person who is certified under
s. 560.765 (3) for tax benefits ceases business operations in the development zone during any of the taxable years that that zone exists, that person may not carry over to any taxable year following the year during which operations cease any unused credits from the taxable year during which operations cease or from previous taxable years.
71.07(2dj)(am)(am) Except as provided under
par. (f) or
s. 73.03 (35), for any taxable year for which the person is certified under
s. 560.765 (3) for tax benefits, any person may claim as a credit against taxes otherwise due under this chapter an amount calculated as follows:
71.07(2dj)(am)1.
1. Modify "member of a targeted group", as defined in section
51 (d) of the internal revenue code as amended to December 31, 1995, to include persons unemployed as a result of a business action subject to
s. 109.07 (1m) and persons specified under
29 USC 1651 (a) and to require a member of a targeted group to be a resident of this state.
71.07(2dj)(am)2.
2. Modify "designated local agency", as defined in section
51 (d) (15) of the internal revenue code, to include the job training partnership act organization for the area that includes the development zone in which the employe in respect to whom the credit under this subsection is claimed works, if the department of commerce approves the criteria used for certification, and the department of commerce.
71.07(2dj)(am)3.
3. Modify the rule for certification under section
51 (d) (16) (A) of the internal revenue code to allow certification within the 90-day period beginning with the first day of employment of the employe by the claimant.
71.07(2dj)(am)4.a.a. If certified under
s. 560.765 (3) for tax benefits before January 1, 1992, modify "qualified wages" as defined in section
51 (b) of the internal revenue code to exclude wages paid before the claimant is certified for tax benefits and to exclude wages that are paid to employes for work at any location that is not in a development zone under
subch. VI of ch. 560. For purposes of this
subd. 4. a., mobile employes work at their base of operations and leased or rented employes work at the location where they perform services.
71.07(2dj)(am)4.b.
b. If certified under
s. 560.765 (3) for tax benefits after December 31, 1991, modify "qualified wages" as defined in section
51 (b) of the internal revenue code to exclude wages paid before the claimant is certified for tax benefits and to exclude wages that are paid to employes for work at any location that is not in a development zone under
subch. VI of ch. 560. For purposes of this
subd. 4. b., mobile employes and leased or rented employes work at their base of operations.
71.07(2dj)(am)4c.
4c. Modify the rule for ineligible individuals under section
51 (i) (1) of the internal revenue code to allow credit for the wages of related individuals paid by an Indian business, as defined in
s. 560.86 (4), or a tribal enterprise, as defined in
sub. (2di) (b) 2., if the Indian business or tribal enterprise is located in a development zone designated under
s. 560.71 (3) (c) 2.
71.07(2dj)(am)4e.
4e. Modify section
51 (c) (2) of the internal revenue code to specify that the rules for on-the-job training and work supplementation payments also apply to those kinds of payments funded by this state.
71.07(2dj)(am)4h.
4h. Modify section
51 (a) of the internal revenue code so that the amount of the credit is 25% of the qualified first-year wages if the wages are paid to an applicant for a Wisconsin works employment position for service either in an unsubsidized position or in a trial job under
s. 49.147 (3) and so that the amount of the credit is 20% of the qualified first-year wages if the wages are not paid to such an applicant.
71.07(2dj)(am)4i.
4i. Modify section
51 (b) (3) of the internal revenue code so that the amount of the qualified first-year wages that may be taken into account is $13,000.
71.07(2dj)(am)4m.
4m. Modify the rule on remuneration under section
51 (f) of the internal revenue code so that it does not apply to persons who are exempt from tax under this chapter.
71.07(2dj)(am)4t.
4t. If certified under
s. 560.765 (3) for tax benefits before January 1, 1992, modify section
51 (i) (3) of the internal revenue code so that for leased or rented employes, except employes of a leasing agency certified for tax benefits who perform services directly for the agency in a development zone, the minimum employment periods apply to the time that they perform services in a development zone for a single lessee or renter, not to their employment by the leasing agency.
71.07(2dj)(am)6.
6. For persons for whom a credit may be claimed under
subd. 5., modify "qualified wages" under section
51 (b) of the internal revenue code so that those wages are based on the wages attributable to service rendered during the one-year period beginning with the date one year after the date on which the individual begins work for the employer.
71.07(2dj)(am)8.
8. Calculate the credit under section
51 of the internal revenue code based on qualified wages for the 2nd year as determined under
subds. 6. and
7.
71.07(2dj)(am)8m.
8m. For each person, whether or not he or she is a member of a targeted group, who is determined by the department of commerce to be a resident of the development zone in which he or she is employed, calculate a credit equal to 10% of the wages earned by such person during the 1st and 2nd years of the person's employment in the development zone, up to a maximum credit of $600 per year.
71.07(2dj)(b)
(b) In computing the credit under this subsection, the wages of leased or rented employes may be claimed only by their employer, not by the person to whom they are rented or leased.
71.07(2dj)(c)
(c) The credit under this subsection may not be claimed by partnerships, limited liability companies and tax-option corporations but the eligibility for, and the amount of, that credit shall be determined on the basis of their economic activity, not that of their shareholders, partners or members. The corporation, partnership or limited liability company shall compute the amount of credit that may be claimed by each of its shareholders, partners or members and shall provide that information to each of its shareholders, partners or members. That credit may be claimed by partners, members of limited liability companies and shareholders of tax-option corporations in proportion to their ownership interests.
71.07(2dj)(e)
(e) No credit may be allowed under this subsection unless the claimant includes with the claimant's return:
71.07(2dj)(e)3.a.a. If certified under
s. 560.765 (3) for tax benefits before January 1, 1992, a statement from the department of commerce verifying the amount of qualifying wages and verifying that the employes were hired for work only in a development zone or are mobile employes whose base of operations is in a development zone.
71.07(2dj)(e)3.b.
b. If certified under
s. 560.765 (3) for tax benefits after December 31, 1991, a statement from the department of commerce verifying the amount of qualifying wages and verifying that the employes were hired for work only in a development zone or are mobile employes or leased or rented employes whose base of operations is in a development zone.
71.07(2dj)(e)4.
4. A copy of any claims for the credit under section
51 of the internal revenue code that are based on wages that also are the basis for a claim under this subsection.
71.07(2dj)(f)
(f) The rules under
sub. (2di) (f) and
(g) as they apply to the credit under that subsection apply to the credit under this subsection.
71.07(2dj)(h)
(h) The rules under
sub. (2di) (b) and
(c) as they apply to the credit under that subsection apply to the credit under this subsection.
71.07(2dL)
(2dL) Development zones location credit. 71.07(2dL)(a)(a) Except as provided in
pars. (ag),
(ar),
(bm) and
(f) and
s. 73.03 (35), for any taxable year for which the person is certified under
s. 560.765 (3) for tax benefits, any person may claim as a credit against taxes otherwise due under this subchapter an amount equal to 2.5% of the amount expended by that person to acquire, construct, rehabilitate or repair real property in a development zone under
subch. VI of ch. 560.
71.07(2dL)(ag)
(ag) If the credit under
par. (a) is claimed for an amount expended to construct, rehabilitate, remodel or repair property, the claimant must have begun the physical work of construction, rehabilitation, remodeling or repair, or any demolition or destruction in preparation for the physical work, after the place where the property is located was designated a development zone under
s. 560.71 and the completed project must be placed in service after the claimant is certified for tax benefits under
s. 560.765 (3). In this paragraph, "physical work" does not include preliminary activities such as planning, designing, securing financing, researching, developing specifications or stabilizing the property to prevent deterioration.
71.07(2dL)(ar)
(ar) If the credit under
par. (a) is claimed for an amount expended to acquire property, the property must have been acquired by the claimant after the place where the property is located was designated a development zone under
s. 560.71 and the completed project must be placed in service after the claimant is certified for tax benefits under
s. 560.765 (3) and the property must not have been previously owned by the claimant or a related person during the 2 years prior to the designation of the development zone under
s. 560.71. No credit is allowed for an amount expended to acquire property until the property, either in its original state as acquired by the claimant or as subsequently constructed, rehabilitated, remodeled or repaired, is placed in service.
71.07(2dL)(aw)
(aw) In
par. (ar), property is previously owned by a claimant or a related person if a claimant may not deduct a loss from a sale to, or exchange of property with, that related person under section
267 of the internal revenue code, except that section
267 (b) of the internal revenue code is modified so that any ownership percentage, rather than 50% ownership, makes a claimant subject to section
267 (a) (1) of the internal revenue code for purposes of this subsection.
71.07(2dL)(b)
(b) No credit is allowed under this subsection for property which is the basis for a credit under
sub. (2di).
71.07(2dL)(bm)
(bm) In calculating the credit under
par. (a) a claimant shall reduce the amount expended to acquire property by a percentage equal to the percentage of the area of the real property not used for the purposes for which the claimant is certified to claim tax benefits under
s. 560.765 (3) and shall reduce the amount expended for other purposes by the amount expended on the part of the property not used for the purposes for which the claimant is certified to claim tax benefits under
s. 560.765 (3).
71.07(2dL)(c)1.1. Except as provided under
subd. 2., the credit under
par. (a), including any credits carried over, may be offset only against the amount of the tax otherwise due under this chapter attributable to income from the business operations of the claimant in the development zone and against the tax attributable to income from directly related business operations.
71.07(2dL)(c)2.
2. If the claimant is located on an Indian reservation, as defined in
s. 560.86 (5), and is an American Indian, as defined in
s. 560.86 (1), an Indian business, as defined in
s. 560.86 (4), or a tribal enterprise, as defined in
sub. (2di) (b) 2., and if the allowable amount of the credit under
par. (a) exceeds the taxes otherwise due under this chapter on or measured by the claimant's income, the amount of the credit not used as an offset against those taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft.
71.07(2dL)(d)
(d) Except as provided in
par. (c) 2., the carry-over provisions of
s. 71.28 (4) (e) and
(f) as they relate to the credit under
s. 71.28 (4) relate to the credit under this subsection and apply as if the development zone continued to exist.
71.07(2dL)(e)
(e) 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 shareholders, partners or members. The corporation, partnership or limited liability company shall compute the amount of credit that may be claimed by each of its shareholders, partners or members and provide that information to its shareholders, partners or members. Partners, members of limited liability companies and shareholders of tax-option corporations may claim the credit based on the partnership's, company's or corporation's activities in proportion to their ownership interest and may offset it against the tax attributable to their income from the partnership's, company's or corporation's business operations in the development zone and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.
71.07(2dL)(f)
(f) Subsection (2di) (d),
(f) and
(g) as it applies to the credit under that subsection applies to the credit under this subsection.
71.07(2dr)
(2dr) Development zones research credit. 71.07(2dr)(a)(a)
Credit. Any person may credit against taxes otherwise due under this chapter an amount equal to 5% of the amount obtained by subtracting from the person's qualified research expenses, as defined in section
41 of the internal revenue code, except that "qualified research expenses" include only expenses incurred by the claimant in a development zone under
subch. VI of ch. 560 and except that "qualified research expenses" do not include compensation used in computing the credit under
sub. (2dj) nor research expenses incurred before the claimant is certified for tax benefits under
s. 560.765 (3), the person's base amount, as defined in section
41 (c) of the internal revenue code, in a development zone, except that gross receipts used in calculating the base amount means gross receipts from sales attributable to Wisconsin under
s. 71.04 (7) (b) 1. and
2. and
(d) and research expenses used in calculating the base amount include research expenses incurred before the claimant is certified for tax benefits under
s. 560.765 (3), in a development zone, if the claimant submits with the claimant's return a copy of the claimant's certification for tax benefits under
s. 560.765 (3) and a statement from the department of commerce verifying the claimant's qualified research expenses for research conducted exclusively in a development zone. The rules under
s. 73.03 (35) apply to the credit under this paragraph. The rules under
sub. (2di) (f) and
(g), as they apply to the credit under that subsection, apply to claims under this paragraph. Section
41 (h) of the internal revenue code does not apply to the credit under this paragraph.
71.07(2dr)(b)
(b)
Development opportunity zones. The development zones research credit under
par. (a), as it applies to a person certified under
s. 560.765 (3), applies to a person that conducts economic activity in a development opportunity zone under
s. 560.795 (1) and that is entitled to tax benefits under
s. 560.795 (3), subject to the limits under
s. 560.795 (2). A development opportunity zone credit under this paragraph may be calculated using expenses incurred by a claimant beginning on the effective date under
s. 560.795 (2) (a) of the development opportunity zone designation of the area in which the claimant conducts economic activity.
71.07(2dr)(bm)
(bm)
Adjustments. Adjustments for acquisitions and dispositions of a major portion of a trade or business shall be made under section
41 of the internal revenue code as limited by this subsection.
71.07(2dr)(c)
(c)
Annualization. In the case of any short taxable year, qualified research expenses shall be annualized as prescribed by the department of revenue.
