71.26(3)(y)1.1. Except as provided in
subd. 2., a corporation shall compute amortization and depreciation under the federal Internal Revenue Code as amended to December 31, 2000, except that property first placed in service by the taxpayer on or after January 1, 1983, but before January 1, 1987, that, under s.
71.04 (15) (b) and
(br), 1985 stats., is required to be depreciated under the Internal Revenue Code as amended to December 31, 1980, and property first placed in service in taxable year 1981 or thereafter but before January 1, 1987, that, under s.
71.04 (15) (bm), 1985 stats., is required to be depreciated under the Internal Revenue Code as amended to December 31, 1980, shall continue to be depreciated under the Internal Revenue Code as amended to December 31, 1980.
71.26(3)(y)2.
2. For property acquired and placed in service in taxable years beginning on or after January 1, 2006, a corporation that is actively engaged in farming may compute amortization and depreciation on property used in farming under any subsequent change to section 101 of
P.L. 107-147 or section 201 of
P.L. 108-27 enacted after December 31, 2005. For purposes of this subdivision, "actively engaged in farming" has the meaning given in
7 CFR 1400.201, and "farming" has the meaning given in section
464 (e) (1) of the Internal Revenue Code. This subdivision does not apply unless a federal law change enacted after December 31, 2005, revises section 101 of
P.L. 107-147 or section 201 of
P.L. 108-27.
71.26(4)
(4) Net business loss carry-forward. A corporation, except a tax-option corporation or an insurer to which
s. 71.45 (4) applies, may offset against its Wisconsin net business income any Wisconsin net business loss sustained in any of the next 15 preceding taxable years, if the corporation was subject to taxation under this chapter in the taxable year in which the loss was sustained, to the extent not offset by other items of Wisconsin income in the loss year and by Wisconsin net business income of any year between the loss year and the taxable year for which an offset is claimed. For purposes of this subsection Wisconsin net business income or loss shall consist of all the income attributable to the operation of a trade or business in this state, less the business expenses allowed as deductions in computing net income. The Wisconsin net business income or loss of corporations engaged in business within and without the state shall be determined under
s. 71.25 (6) and
(10) to
(12). Nonapportionable losses having a Wisconsin situs under
s. 71.25 (5) (b) shall be included in Wisconsin net business loss; and nonapportionable income having a Wisconsin situs under
s. 71.25 (5) (b), whether taxable or exempt, shall be included in other items of Wisconsin income and Wisconsin net business income for purposes of this subsection.
71.26 History
History: 1987 a. 312;
1987 a. 411 ss.
22,
124 to
129;
1989 a. 31,
336;
1991 a. 37,
39,
221,
269;
1993 a. 16,
112,
246,
263,
399,
437,
491;
1995 a. 27,
56,
351,
371,
380,
428;
1997 a. 27,
37,
184,
237;
1999 a. 9,
65;
1999 a. 150 s.
672;
1999 a. 167,
194;
2001 a. 16,
38,
106,
109;
2003 a. 33,
85,
99,
135,
255,
326;
2005 a. 25,
74,
335,
361,
362,
479,
483;
2007 a. 20,
96,
97,
151,
226.
71.26 Annotation
Under s. 71.06 (1), [now 71.26 (4)], the loss carry-over privilege was limited to an "identical taxpayer"; merging corporations are not entitled to the privilege. DOR v. U.S. Shoe Corp.
158 Wis. 2d 123,
462 N.W.2d 233 (Ct. App. 1990).
71.265
71.265
Previously exempt corporations; basis and depreciation. The Wisconsin adjusted basis of the property of any corporation that has, in any taxable year before it ceases to be exempt from tax under this chapter, taken depreciation or amortization of depreciable property for federal income tax purposes shall be the adjusted basis of that property as computed for federal income tax purposes as of the beginning of the taxable year in which the corporation ceases to be exempt. The corporation may continue, after it ceases to be exempt, to depreciate that property under the method used previously for federal income tax purposes.
71.265 History
History: 1987 a. 399;
1987 a. 411 s.
33; Stats. 1987 s. 71.265.
71.27
71.27
Rates of taxation. 71.27(1)(1) The taxes to be assessed, levied and collected upon Wisconsin net incomes of corporations shall be computed at the rate of 7.9%.
71.27(2)
(2) The corporation franchise tax imposed under
s. 71.23 (2) and measured by Wisconsin net income shall be computed at the rate of 7.9%.
71.27 History
History: 1987 a. 312.
71.275
71.275
Rate changes. If a rate under
s. 71.27 changes during a taxable year, the taxpayer shall compute the tax for that taxable year by the methods applicable to the federal income tax under section
15 of the internal revenue code.
71.275 History
History: 1989 a. 31.
71.28(1)(1)
Community development finance credit. 71.28(1)(a)(a) Any corporation which contributes an amount to the community development finance authority under s.
233.03, 1985 stats., or to the housing and economic development authority under
s. 234.03 (32) and, in the same year, purchases common stock or partnership interests of the community development finance company issued under s.
233.05 (2), 1985 stats., or
s. 234.95 (2) in an amount no greater than the contribution to the authority may credit against taxes otherwise due an amount equal to 75% of the purchase price of the stock or partnership interests. The credit received under this paragraph may not exceed 75% of the contribution to the community development finance authority.
71.28(1)(b)
(b) Any corporation receiving a credit under this subsection 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.
71.28(1)(c)
(c) A claimant who has filed a timely claim under this subsection may file an amended claim with the department of revenue within 4 years of the last day prescribed by law for filing the original claim.
71.28(1dd)
(1dd) Development zones day care credit. 71.28(1dd)(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.
71.28(1dd)(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.
71.28(1dd)(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.
71.28(1dd)(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, entitled under
s. 560.795 (3) (a) and begins business operations in a zone under
s. 560.795 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.
71.28(1dd)(d)
(d) Subsection (4) (g) and
(h), as it applies to the credit under
sub. (4), applies to the credit under this subsection.
71.28(1dd)(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.
71.28(1dd)(e)
(e) The credit under this subsection, as it applies to a person certified under
s. 560.765 (3), applies to a corporation that conducts economic activity in a 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 credit under this subsection may be credited using expenses incurred by a claimant on July 29, 1995.
71.28(1dd)(f)
(f) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.
71.28(1de)
(1de) Development zones environmental remediation credit. 71.28(1de)(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, entitled under
s. 560.795 (3) (a) and begins business operations in a zone under
s. 560.795 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:
71.28(1de)(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, a development opportunity zone under
s. 560.795 or an enterprise development zone under
s. 560.797 and after the claimant is certified under
s. 560.765 (3), entitled under
s. 560.795 (3) (a) or certified under
s. 560.797 (4) (a).
71.28(1de)(c)
(c) Subsection (4) (g) and
(h), as it applies to the credit under
sub. (4), applies to the credit under this subsection.
71.28(1de)(d)
(d) The credit under this subsection, as it applies to a person certified under
s. 560.765 (3), applies to a corporation that conducts economic activity in a 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 credit under this subsection may be credited using expenses incurred by a claimant on July 29, 1995.
71.28(1de)(e)
(e) No credit may be claimed under this subsection for taxable years that begin on January 1, 1998, or thereafter. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.
71.28(1di)
(1di) Development zones investment credit. 71.28(1di)(a)(a) Except as provided in
pars. (dm) and
(f) and
s. 73.03 (35), for any taxable year for which the person is entitled under
s. 560.795 (3) to claim 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:
71.28(1di)(a)1.
1. The investment must be in property that is purchased after the person is entitled under
s. 560.795 (3) to claim tax benefits and that is used for at least 50% of its use in the conduct of the person's business operations 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.
71.28(1di)(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.
71.28(1di)(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.
71.28(1di)(a)4.
4. No credit is allowed under this subsection for property which is the basis for a credit under
sub. (1dL).
71.28(1di)(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, as defined in
s. 71.07 (2di) (b) 2., 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.
71.28(1di)(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 limited liability 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; except that partners, members, and shareholders in a development zone under
s. 560.795 (1) (e) may offset the credit against the amount of the tax attributable to their income from all of the partnership's, company's, or corporation's business operations; and against the tax attributable to their income from the partnership's, company's or corporation's directly related business operations.
71.28(1di)(c)
(c) Except as provided in
par. (b) 2., the carry-over provisions of
sub. (4) (e) and
(f) as they relate to the credit under that subsection relate to the credit under this subsection and apply as if the development zone continued to exist.
71.28(1di)(d)
(d) No credit may be allowed under this subsection unless the claimant includes with the claimant's return:
71.28(1di)(d)1.
1. A copy of a verification from the department of commerce that the claimant may claim tax benefits under
s. 560.795 (3).
71.28(1di)(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).
71.28(1di)(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.
71.28(1di)(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.
71.28(1di)(f)
(f) If a person who is entitled under
s. 560.795 (3) to claim tax benefits becomes ineligible for such tax benefits, that person may claim no credits under this subsection for the taxable year that includes the day on which the person becomes ineligible for tax benefits 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 the person becomes ineligible for tax benefits or succeeding taxable years.
71.28(1di)(g)
(g) If a person who is entitled under
s. 560.795 (3) to claim 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.
71.28(1di)(h)
(h) Subsection (4) (g) and
(h) as it applies to the credit under that subsection applies to the credit under this subsection.
71.28(1di)(i)
(i) The development zones credit under this subsection, as it applies to a person certified under
s. 560.765 (3), applies to a corporation 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.
71.28(1di)(j)
(j) No credit may be claimed under this subsection for taxable years that begin after December 31, 1997, and end before January 1, 2000. Credits under this subsection for taxable years that begin before January 1, 1998, may be carried forward to taxable years that begin on January 1, 1998, or thereafter.
71.28(1dj)(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:
71.28(1dj)(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 dislocated workers, as defined in
29 USC 2801 (9), and to require a member of a targeted group to be a resident of this state.
71.28(1dj)(am)2.
2. Modify "designated local agency", as defined in section
51 (d) (15) of the internal revenue code, to include the local workforce development board established under
29 USC 2832 for the area that includes the development zone in which the employee 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.
71.28(1dj)(am)3.
3. Modify the rule for certification under section
51 (d) (16) (A) of the internal revenue code to allow certification within the period beginning with the first day of employment of the employee.
71.28(1dj)(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 employees 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 employees work at their base of operations and leased or rented employees work at the location where they perform services.
71.28(1dj)(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 employees 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 employees and leased or rented employees work at their base of operations.
71.28(1dj)(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
s. 71.07 (2di) (b) 2., if the Indian business or tribal enterprise is located in a development zone designated under
s. 560.71 (3) (c) 2.
71.28(1dj)(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.
71.28(1dj)(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.
71.28(1dj)(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.
71.28(1dj)(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.
71.28(1dj)(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 employees, except employees 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.
71.28(1dj)(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.
71.28(1dj)(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.
71.28(1dj)(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.
71.28(1dj)(b)
(b) In computing the credit under this subsection, the wages of leased or rented employees may be claimed only by their employer, not by the person to whom they are rented or leased.
71.28(1dj)(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.
71.28(1dj)(e)
(e) No credit may be allowed under this subsection unless the claimant includes with the claimant's return:
71.28(1dj)(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 employees were hired for work only in a development zone or are mobile employees whose base of operations is in a development zone.
71.28(1dj)(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 employees were hired for work only in a development zone or are mobile employees or leased or rented employees whose base of operations is in a development zone.
71.28(1dj)(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.
71.28(1dj)(f)
(f) The rules under
sub. (1di) (f) and
(g) as they apply to the credit under that subsection apply to the credit under this subsection.
