SB62, s. 103 5Section 103. 71.07 (5d) (b) of the statutes is renumbered 71.07 (5d) (b) (intro.)
6and amended to read:
SB62,53,97 71.07 (5d) (b) Filing claims. (intro.) Subject to the limitations provided in this
8subsection and in s. 560.205, a claimant may claim as a credit against the tax
9imposed under s. 71.02 or 71.08, up to the amount of those taxes, the following:
SB62,53,13 101. For taxable years beginning before January 1, 2008, in each taxable year for
112 consecutive years, beginning with the taxable year as certified by the department
12of commerce, an amount equal to 12.5 percent of the claimant's bona fide angel
13investment made directly in a qualified new business venture.
SB62, s. 104 14Section 104. 71.07 (5d) (b) 2. of the statutes is created to read:
SB62,53,1815 71.07 (5d) (b) 2. For taxable years beginning after December 31, 2007, for the
16taxable year certified by the department of commerce, an amount equal to 25 percent
17of the claimant's bona fide angel investment made directly in a qualified new
18business venture.
SB62, s. 105 19Section 105. 71.07 (5d) (c) 2. of the statutes is amended to read:
SB62,53,2320 71.07 (5d) (c) 2. The For taxable years beginning before January 1, 2008, the
21maximum amount of a claimant's investment that may be used as the basis for a
22credit under this subsection is $2,000,000 for each investment made directly in a
23business certified under s. 560.205 (1).
SB62, s. 106 24Section 106. 71.07 (5e) (b) of the statutes is amended to read:
SB62,54,8
171.07 (5e) (b) Filing claims. Subject to the limitations provided in this
2subsection and subject to 2005 Wisconsin Act 479, section 17, beginning in the first
3taxable year following the taxable year in which the claimant claims an exemption
4a deduction under s. 77.54 (48) 77.585 (9), a claimant may claim as a credit against
5the taxes imposed under ss. 71.02 and 71.08, up to the amount of those taxes, in each
6taxable year for 2 years, the amount of sales and use tax certified by the department
7of commerce that resulted from the claimant claimed as an exemption claiming a
8deduction
under s. 77.54 (48) 77.585 (9).
SB62, s. 107 9Section 107. 71.07 (5e) (c) 1. of the statutes is amended to read:
SB62,54,1110 71.07 (5e) (c) 1. No credit may be allowed under this subsection unless the
11claimant satisfies the requirements under s. 77.54 (48) 77.585 (9).
SB62, s. 108 12Section 108. 71.07 (5e) (c) 3. of the statutes is amended to read:
SB62,54,1613 71.07 (5e) (c) 3. The total amount of the credits and exemptions the sales and
14use tax resulting from the deductions claimed under s. 77.585 (9)
that may be claimed
15by all claimants under this subsection and ss. 71.28 (5e), 71.47 (5e), and 77.54 (48)
1677.585 (9) is $7,500,000, as determined by the department of commerce.
SB62, s. 109 17Section 109. 71.08 (1) (intro.) of the statutes is amended to read:
SB62,55,218 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
19couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
20ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (2fd), (3m), (3n),
21(3p), (3r), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (6), (6e), and (9e), 71.28 (1dd), (1de),
22(1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w), and 71.47
23(1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (1fd), (2m), (3), (3n), (3t), and (3w),
24and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than
25the tax under this section, there is imposed on that natural person, married couple

1filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative
2minimum tax computed as follows:
SB62, s. 110 3Section 110. 71.10 (1) of the statutes is amended to read:
SB62,55,154 71.10 (1) Allocation of gross income, deductions, credits between 2 or more
5businesses.
In any case of 2 or more organizations, trades or businesses (whether or
6not incorporated, whether or not organized in the United States and, whether or not
7affiliated, and whether or not unitary) owned or controlled directly or indirectly by
8the same interests, the secretary or the secretary's delegate may distribute,
9apportion or allocate gross income, deductions, credits or allowances between or
10among such organizations, trades or businesses, if the secretary determines that
11such distribution, apportionment or allocation is necessary in order to prevent
12evasion of taxes or clearly to reflect the income of any of such organizations, trades
13or businesses. The authority granted under this subsection is in addition to, and not
14a limitation of or dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45., 71.26
15(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 16Section 111. 71.10 (1m) of the statutes is created to read:
SB62,55,2317 71.10 (1m) Transactions without economic substance. (a) If any person,
18directly or indirectly, engages in a transaction or series of transactions without
19economic substance to create a loss or to reduce taxable income or to increase credits
20allowed in determining Wisconsin tax, the department shall determine the amount
21of a taxpayer's taxable income or tax so as to reflect what would have been the
22taxpayer's taxable income or tax if not for the transaction or transactions without
23economic substance causing the reduction in taxable income or tax.
SB62,55,2524 (b) A transaction has economic substance only if the taxpayer shows all of the
25following:
SB62,56,2
11. The transaction changes the taxpayer's economic position in a meaningful
2way, apart from federal, state, local, and foreign tax effects.
SB62,56,63 2. The taxpayer has a substantial nontax purpose for entering into the
4transaction and the transaction is a reasonable means of accomplishing the
5substantial nontax purpose. A transaction has a substantial nontax purpose if it has
6substantial potential for profit, disregarding any tax effects.
SB62,56,127 (c) With respect to transactions between members of a controlled group as
8defined in section 267 (f) (1) of the Internal Revenue Code, such transactions shall
9be presumed to lack economic substance and the taxpayer shall bear the burden of
10establishing by clear and convincing evidence that a transaction or a series of
11transactions between the taxpayer and one or more members of the controlled group
12has economic substance.
SB62, s. 112 13Section 112. 71.10 (4) (gv) of the statutes is created to read:
SB62,56,1414 71.10 (4) (gv) Economic development tax credit under s. 71.07 (2dy).
SB62, s. 113 15Section 113. 71.10 (4) (i) of the statutes is amended to read:
SB62,56,2416 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland
17preservation credit under subch. IX, homestead credit under subch. VIII, farmland
18tax relief credit under s. 71.07 (3m), farmers' drought property tax credit under s.
1971.07 (2fd), dairy manufacturing facility investment credit under s. 71.07 (3p), meat
20processing facility investment credit under s. 71.07 (3r),
film production services
21credit under s. 71.07 (5f) (b) 2., veterans and surviving spouses property tax credit
22under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), earned income tax
23credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld
24under subch. X.
SB62, s. 114 25Section 114. 71.21 (4) of the statutes is amended to read:
SB62,57,4
171.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
2(2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t), (3w), (5e),
3(5f), (5g), (5h), (5i), (5j), and (5k) and passed through to partners shall be added to
4the partnership's income.
SB62, s. 115 5Section 115. 71.22 (1g) of the statutes is amended to read:
SB62,57,116 71.22 (1g) For purposes of s. 71.25 (9) (df) and, (dh), (dj), and (dk), "commercial
7domicile" means the location from which a trade or business is principally managed
8and directed, based on any factors the department determines are appropriate,
9including the location where the greatest number of employees of the trade or
10business work, have their office or base of operations, or from which the employees
11are directed or controlled.
SB62, s. 116 12Section 116. 71.22 (1r) of the statutes is amended to read:
SB62,58,213 71.22 (1r) "Doing business in this state" includes issuing credit, debit, or travel
14and entertainment cards to customers in this state; regularly selling products or
15services of any kind or nature to customers in this state that receive the product or
16service in this state; regularly soliciting business from potential customers in this
17state; regularly performing services outside this state for which the benefits are
18received in this state; regularly engaging in transactions with customers in this state
19that involve intangible property and result in receipts flowing to the taxpayer from
20within this state; holding loans secured by real or tangible personal property located
21in this state;
owning, directly or indirectly, a general or limited partnership interest
22in a partnership that does business in this state, regardless of the percentage of
23ownership; and owning, directly or indirectly, an interest in a limited liability
24company that does business in this state, regardless of the percentage of ownership,

1if the limited liability company is treated as a partnership for federal income tax
2purposes.
SB62, s. 117 3Section 117. 71.22 (1t) of the statutes is amended to read:
SB62,58,84 71.22 (1t) For purposes of s. 71.25 (9) (df) and, (dh), (dj), and (dk), "domicile"
5means an individual's true, fixed, and permanent home where the individual intends
6to remain permanently and indefinitely and to which, whenever absent, the
7individual intends to return, except that no individual may have more than one
8domicile at any time.
SB62, s. 118 9Section 118. 71.22 (3g) of the statutes is created to read:
SB62,58,1310 71.22 (3g) For purposes of ss. 71.26 (2) (a) 7. and 9. and 71.255 (2) (d) 1.,
11"intangible expenses" include the following, to the extent that the amounts would
12otherwise be deductible in determining net income under the Internal Revenue Code
13as modified under s. 71.26 (3):
SB62,58,1614 (a) Expenses, losses, and costs for, related to, or directly or indirectly in
15connection with the acquisition, use, maintenance, management, ownership, sale,
16exchange, or any other disposition of intangible property.
SB62,58,1817 (b) Losses related to, or incurred in connection directly or indirectly with,
18factoring transactions or discounting transactions.
SB62,58,1919 (c) Royalty, patent, technical, and copyright fees.
SB62,58,2020 (d) Licensing fees.
SB62,58,2121 (e) Other similar expenses, losses, and costs.
SB62, s. 119 22Section 119. 71.22 (3h) of the statutes is created to read:
SB62,58,2523 71.22 (3h) "Intangible property" includes stocks, bonds, financial instruments,
24patents, patent applications, trade names, trademarks, service marks, copyrights,
25mask works, trade secrets, and similar types of intangible assets.
SB62, s. 120
1Section 120. 71.22 (3m) of the statutes is amended to read:
SB62,59,42 71.22 (3m) For purposes of s. ss. 71.26 (2) (a) 7. and 9. and 71.255 (2) (d) 1.,
3"interest expenses" means interest that would otherwise be deductible under section
4163 of the Internal Revenue Code, as modified under s. 71.26 (3).
SB62, s. 121 5Section 121. 71.22 (6d) of the statutes is created to read:
SB62,59,126 71.22 (6d) For purposes of s. 71.26 (2) (a) 7. and 9., "management fees" include
7expenses and costs, not including interest expenses, pertaining to accounts
8receivable, accounts payable, employee benefit plans, insurance, legal matters,
9payroll, data processing, purchasing, taxation, financial matters, securities,
10accounting, or reporting and compliance matters or similar activities, to the extent
11that the amounts would otherwise be deductible in determining net income under
12the Internal Revenue Code as modified by s. 71.26 (3).
SB62, s. 122 13Section 122. 71.22 (9g) of the statutes is amended to read:
SB62,59,1714 71.22 (9g) For purposes of s. 71.25 (9) (df) and, (dh), (dj), and (dk), "state" means
15a state of the United States, the District of Columbia, the commonwealth of Puerto
16Rico, or any territory or possession of the United States, unless the context requires
17that "state" means only the state of Wisconsin.
SB62, s. 123 18Section 123. 71.25 (intro.) of the statutes is amended to read:
SB62,59,21 1971.25 Situs of income; allocation and apportionment. (intro.) For
20purposes of determining the situs of income under this section and s. 71.255 (5) (a)
211. and 2.
:
SB62, s. 124 22Section 124. 71.25 (5) (b) 1. of the statutes is renumbered 71.25 (5) (b).
SB62, s. 125 23Section 125. 71.25 (5) (b) 2. of the statutes is repealed.
SB62, s. 126 24Section 126. 71.25 (9) (d) of the statutes is repealed.
SB62, s. 127 25Section 127. 71.25 (9) (dj) of the statutes is created to read:
SB62,60,6
171.25 (9) (dj) 1. Except as provided in par. (df), gross royalties and other gross
2receipts received for the use or license of intangible property, including patents,
3copyrights, trademarks, trade names, service names, franchises, licenses, plans,
4specifications, blueprints, processes, techniques, formulas, designs, layouts,
5patterns, drawings, manuals, technical know-how, contracts, and customer lists, are
6sales in this state if any of the following applies:
SB62,60,127 a. The purchaser or licensee uses the intangible property in the operation of a
8trade or business at a location in this state. If the purchaser or licensee uses the
9intangible property in the operation of a trade or business in more than one state,
10the gross royalties and other gross receipts from the use of the intangible property
11shall be divided between those states having jurisdiction to impose an income tax on
12the taxpayer in proportion to the use of the intangible property in those states.
SB62,60,1413 b. The purchaser or licensee is billed for the purchase or license of the use of
14the intangible property at a location in this state.
SB62,60,1615 c. The purchaser or licensee of the use of the intangible property has its
16commercial domicile in this state.
SB62,60,2117 2. If the taxpayer is not within the jurisdiction, for income or franchise tax
18purposes, in the state in which the gross royalties or other gross receipts are
19apportioned under this paragraph, but the taxpayer's commercial domicile is in this
20state, 50 percent of those gross royalties or other gross receipts shall be included in
21the numerator of the sales factor.
SB62, s. 128 22Section 128. 71.25 (9) (dk) of the statutes is created to read:
SB62,60,2423 71.25 (9) (dk) 1. Sales of intangible property, excluding securities, are sales in
24this state if any of the following applies:
SB62,61,5
1a. The purchaser uses the intangible property in the regular course of business
2operations in this state or for personal use in this state. If the purchaser uses the
3intangible property in more than one state, the sales shall be divided between those
4states having jurisdiction to impose an income tax on the taxpayer in proportion to
5the use of the intangible property in those states.
SB62,61,76 b. The purchaser is billed for the purchase of the intangible property at a
7location in this state.
SB62,61,98 c. The purchaser of the intangible property has its commercial domicile in this
9state.
SB62,61,1310 2. If the taxpayer is not within the jurisdiction, for income or franchise tax
11purposes, in the state in which the sales of intangible property are apportioned under
12this paragraph, but the taxpayer's commercial domicile is in this state, 50 percent
13of those gross receipts shall be included in the numerator of the sales factor.
SB62, s. 129 14Section 129. 71.25 (10) (a) of the statutes is renumbered 71.25 (10) (a) 1.
SB62, s. 130 15Section 130. 71.25 (10) (a) 2. of the statutes is created to read:
SB62,61,1916 71.25 (10) (a) 2. As used in this section, "financial organization" includes any
17subsidiary of an entity described in subd. 1., if a significant purpose for the
18subsidiary is to hold investments or if the subsidiary primarily functions to hold
19investments.
SB62, s. 131 20Section 131. 71.255 of the statutes is created to read:
SB62,61,21 2171.255 Combined Reporting. (1) Definitions. In this section:
SB62,61,2522 (a) "Combined group" means the group of all persons whose income and
23apportionment factors are required to be taken into account under sub. (2) to
24determine a member's share of the net business income or loss apportionable to this
25state that is attributable to a unitary business.
SB62,62,4
1(b) "Combined report" means a report in the form and manner prescribed by
2the department that specifies a combined group's income from the unitary business,
3apportionment factors attributable to the unitary business, and any other tax return
4information prescribed by the department.
SB62,62,55 (c) "Commonly controlled group" means any of the following:
SB62,62,126 1. A parent corporation and any one or more corporations or chains of
7corporations that are connected to the parent corporation by direct or indirect
8ownership by the parent corporation, if the parent corporation owns stock
9representing more than 50 percent of the voting power of at least one of the connected
10corporations or if the parent corporation or any of the connected corporations owns
11stock that cumulatively represents more than 50 percent of the voting power of each
12of the connected corporations.
SB62,62,1513 2. Any 2 or more corporations if a common owner, regardless of whether the
14owner is a corporate entity, directly or indirectly owns stock representing more than
1550 percent of the voting power of the corporations or connected corporations.
SB62,62,1716 3. Any 2 or more corporations if stock representing more than 50 percent of the
17voting power in each corporation are interests that cannot be separately transferred.
SB62,62,2218 4. Any 2 or more corporations if stock representing more than 50 percent of the
19voting power in each corporation is directly owned by, or for the benefit of, family
20members. In this subdivision, "family member" means an individual related by
21blood, marriage, or adoption within the 3rd degree of kinship, as computed under s.
22990.001 (16), or the spouse of such individual.
SB62,62,2423 (d) "Consolidated foreign operating corporation" means a corporation that, for
24the taxable year, satisfies all of the following conditions:
SB62,62,2525 1. It is a member of a unitary business.
SB62,63,2
12. It is included in the same federal consolidated return as at least one other
2corporation in that unitary business.
SB62,63,53 3. It has active foreign business income, as defined in section 861 (c) (1) B of
4the Internal Revenue Code, in an amount that is 80 percent or more of the
5corporation's worldwide income.
SB62,63,86 (e) Corporation" means any corporation, as defined in s. 71.22 (1k), wherever
7located, which if it were doing business in this state would be subject to this chapter.
8"Corporation" does not include a tax-option corporation.
SB62,63,99 (f) "Department" means the department of revenue.
SB62,63,1010 (g) "Doing business in this state" has the meaning given in s. 71.22 (1r).
SB62,63,1211 (h) "Domestic" means incorporated, organized, or created in the United States
12or under the laws of the United States or any state.
SB62,63,1313 (i) "File" has the meaning given in s. 71.22 (2m).
SB62,63,1514 (j) "Foreign" means not incorporated, organized, or created in the United States
15or under the laws of the United States or any state.
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