SB21-SSA1,741,7 71.28 (4) (ad) 5. a. For taxable years beginning after December 31, 2014, a corporation may claim a credit against the tax imposed under s. 71.23, as allocated under par. (d), an amount equal to 11.5 percent of the amount by which the corporation's qualified research expenses for the taxable year exceed 50 percent of the average qualified research expenses for the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit. If the corporation had no qualified research expenses in any of the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit, the claimant may claim an amount equal to 5.75 percent of the corporation's qualified research expenses for the taxable year for which the claimant claims the credit.

SB21-SSA1,741,16 b. For purposes of subd. 5. a., "qualified research expenses" means qualified research expenses as defined in section 41 of the Internal Revenue Code, except that "qualified research expenses" includes only expenses incurred by the claimant for research related to designing internal combustion engines for vehicles, including expenses related to designing vehicles that are powered by such engines and improving production processes for such engines and vehicles, incurred for research conducted in this state for the taxable year and does not include compensation used in computing the credit under sub. (1dx). Section 41 (f) (1), (2), (5), and (6) and (h) of the Internal Revenue Code does not apply to the credit under this subdivision.

SB21-SSA1,2319f Section 2319f. 71.28 (4) (ad) 6. of the statutes is created to read:

SB21-SSA1,742,2 71.28 (4) (ad) 6. a. For taxable years beginning after December 31, 2014, a corporation may claim a credit against the tax imposed under s. 71.23, as allocated under par. (d), an amount equal to 11.5 percent of the amount by which the corporation's qualified research expenses for the taxable year exceed 50 percent of the average qualified research expenses for the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit. If the corporation had no qualified research expenses in any of the 3 taxable years immediately preceding the taxable year for which the claimant claims the credit, the claimant may claim an amount equal to 5.75 percent of the corporation's qualified research expenses for the taxable year for which the claimant claims the credit.

SB21-SSA1,742,12 b. For purposes of subd. 6. a., "qualified research expenses" means qualified research expenses as defined in section 41 of the Internal Revenue Code, except that "qualified research expenses" includes only expenses incurred by the claimant for research related to the design and manufacturing of energy efficient lighting systems, building automation and control systems, or automotive batteries for use in hybrid-electric vehicles, that reduce the demand for natural gas or electricity or improve the efficiency of its use, incurred for research conducted in this state for the taxable year and does not include compensation used in computing the credit under sub. (1dx). Section 41 (f) (1), (2), (5), and (6) and (h) of the Internal Revenue Code does not apply to the credit under this subdivision.

SB21-SSA1,2319g Section 2319g. 71.28 (4) (af) of the statutes is amended to read:

SB21-SSA1,742,18 71.28 (4) (af) Computation. If For taxable years beginning before January 1, 2015, if in any taxable year a corporation claims a credit under par. (ad) 1., 2., or 3., or any combination of those credits, the corporation may use a different computation method to calculate each of the credits and may choose to change the computation method once for each credit without the department's approval.

SB21-SSA1,2320b Section 2320b. 71.28 (4) (am) 1. of the statutes is amended to read:

SB21-SSA1,743,20 71.28 (4) (am) 1. In addition to the credit under par. (ad), any corporation may credit against taxes otherwise due under this chapter an amount equal to 5 percent of the amount obtained by subtracting from the corporation'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. II of ch. 238 or subch. VI of ch. 560, 2009 stats., except that a taxpayer may elect the alternative computation under section 41 (c) (4) of the Internal Revenue Code and that election applies until the department permits its revocation and except that "qualified research expenses" do does not include compensation used in computing the credit under sub. (1dj) nor research expenses incurred before the claimant is certified for tax benefits under s. 238.365 (3) or s. 560.765 (3), 2009 stats., or the corporation'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. 71.25 (9) (b) 1. and 2., (df) 1. and 2., (dh) 1., 2., and 3., (dj), and (dk) and research expenses used in calculating the base amount include research expenses incurred before the claimant is certified for tax benefits under s. 238.365 (3) or s. 560.765 (3), 2009 stats., 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. 238.365 (3) or s. 560.765 (3), 2009 stats., and a statement from the department of commerce or the Wisconsin Economic Development Corporation 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 subdivision. The rules under sub. (1di) (f) and (g) as they apply to the credit under that subsection apply to claims under this subdivision. Section 41 (h) of the Internal Revenue Code does not apply to the credit under this subdivision.

SB21-SSA1,2322 Section 2322. 71.28 (4m) (a) of the statutes is amended to read:

SB21-SSA1,744,2 71.28 (4m) (a) Definition. In this subsection, "qualified research expenses" means qualified research expenses as defined in section 41 of the Internal Revenue Code, except that "qualified research expenses" includes only expenses incurred by the claimant for research conducted in this state for the taxable year and except that "qualified research expenses" do does not include compensation used in computing the credits credit under subs. (1dj) and sub. (1dx).

SB21-SSA1,2327b Section 2327b. 71.28 (5j) (a) 2d. of the statutes is amended to read:

SB21-SSA1,744,9 71.28 (5j) (a) 2d. "Diesel replacement renewable fuel" includes biodiesel and any other fuel derived from a renewable resource that meets all of the applicable requirements of the American Society for Testing and Materials for that fuel and that the department of commerce or the department of safety and professional services agriculture, trade and consumer protection designates by rule as a diesel replacement renewable fuel.

SB21-SSA1,2328b Section 2328b. 71.28 (5j) (a) 2m. of the statutes is amended to read:

SB21-SSA1,744,16 71.28 (5j) (a) 2m. "Gasoline replacement renewable fuel" includes ethanol and any other fuel derived from a renewable resource that meets all of the applicable requirements of the American Society for Testing and Materials for that fuel and that the department of commerce or the department of safety and professional services agriculture, trade and consumer protection designates by rule as a gasoline replacement renewable fuel.

SB21-SSA1,2329b Section 2329b. 71.28 (5j) (c) 3. of the statutes is amended to read:

SB21-SSA1,744,23 71.28 (5j) (c) 3. The department of commerce or the department of safety and professional services agriculture, trade and consumer protection shall establish standards to adequately prevent, in the distribution of conventional fuel to an end user, the inadvertent distribution of fuel containing a higher percentage of renewable fuel than the maximum percentage established by the federal environmental protection agency for use in conventionally-fueled engines.

SB21-SSA1,2331 Section 2331. 71.28 (5n) (a) 3. of the statutes is amended to read:

SB21-SSA1,745,5 71.28 (5n) (a) 3. "Direct costs" includes all of the claimant's ordinary and necessary expenses paid or incurred during the taxable year in carrying on the trade or business that are deductible as business expenses under section 162 of the Internal Revenue Code and identified as direct costs in the claimant's managerial or cost accounting records.

SB21-SSA1,2332 Section 2332. 71.28 (5n) (a) 4. of the statutes is amended to read:

SB21-SSA1,745,11 71.28 (5n) (a) 4. "Indirect costs" includes all of the claimant's ordinary and necessary expenses paid or incurred during the taxable year in carrying on the trade or business that are deductible as business expenses under section 162 of the Internal Revenue Code, other than cost of goods sold and direct costs, and identified as indirect costs in the claimant's managerial or cost accounting records.

SB21-SSA1,2333 Section 2333. 71.28 (5n) (a) 5. d. of the statutes is created to read:

SB21-SSA1,745,17 71.28 (5n) (a) 5. d. For purposes of subd. 5. a., a claimant who the department approves to be classified as a manufacturer for purposes of s. 70.995, but who is not eligible to be listed on the department's manufacturing roll until January 1 of the following year, may claim the credit in the year in which the manufacturing classification is approved.

SB21-SSA1,2333d Section 2333d. 71.28 (5n) (b) 3. of the statutes is amended to read:

SB21-SSA1,745,20 71.28 (5n) (b) 3. For taxable years beginning after December 31, 2014, and before January 1, 2016, 5.526 5.025 percent.

SB21-SSA1,2337d Section 2337d. 71.28 (6) (cn) of the statutes is created to read:

SB21-SSA1,745,24 71.28 (6) (cn) For taxable years beginning after December 31, 2014, the Wisconsin Economic Development Corporation shall certify a person to claim a credit under par. (a) 3. if all of the following applies:

SB21-SSA1,746,2 1. The corporation previously certified the person to claim a credit under par. (a) 3. for any taxable year beginning before January 1, 2015.

SB21-SSA1,746,5 2. The proposed project for which the person wishes to claim a credit under this paragraph for any taxable year beginning after December 31, 2014, is located in the city of Green Bay.