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71.28(5n)(a)2. 2. "Claimant" means a person who files a claim under this subsection.
71.28(5n)(a)3. 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 under section 162 of the Internal Revenue Code and identified as direct costs in the claimant's managerial or cost accounting records.
71.28(5n)(a)4. 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 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.
71.28(5n)(a)5.a.a. "Manufacturing property factor" means a fraction, the numerator of which is the average value of the claimant's real and personal property assessed under s. 70.995, owned or rented and used in this state by the claimant during the taxable year to manufacture qualified production property, and the denominator of which is the average value of all the claimant's real and personal property owned or rented during the taxable year and used by the claimant to manufacture qualified production property.
71.28(5n)(a)5.b. b. For purposes of subd. 5. a., property owned by the claimant is valued at its original cost and property rented by the claimant is valued at an amount equal to the annual rental paid by the claimant, less any annual rental received by the claimant from sub-rentals, multiplied by 8.
71.28(5n)(a)5.c. c. For purposes of subd. 5. a., the average value of property is determined by averaging the values at the beginning and ending of the taxable year, except that the secretary of revenue may require the averaging of monthly values during the taxable year, if such averaging is reasonably required to properly reflect the average value of the claimant's property.
71.28(5n)(a)6. 6. "Production gross receipts" means gross receipts from the lease, rental, license, sale, exchange, or other disposition of qualified production property.
71.28(5n)(a)7. 7. "Production gross receipts factor" means a fraction, the numerator of which is production gross receipts and the denominator of which is all gross income from whatever source, except for those items specifically excluded under the Internal Revenue Code as adopted by this state and otherwise excluded under Wisconsin law. For purposes of the denominator, income includes gross sales, gross dividends, gross interest income, gross rents, gross royalties, the gross sales price from the disposition of capital assets and business assets, gross income from pass-through entities, and all other gross receipts that are included in income, before apportionment for Wisconsin tax purposes under s. 71.25 (6).
71.28(5n)(a)8. 8. "Qualified production activities income" means the amount of the claimant's production gross receipts for the taxable year that exceeds the sum of the cost of goods sold that are allocable to such receipts, the direct costs that are allocable to such receipts, and the indirect costs multiplied by the production gross receipts factor. "Qualified production activities income" does not include any of the following:
71.28(5n)(a)8.a. a. Income from film production.
71.28(5n)(a)8.b. b. Income from producing, transmitting, or distributing electricity, natural gas, or potable water.
71.28(5n)(a)8.c. c. Income from constructing real property.
71.28(5n)(a)8.d. d. Income from engineering or architectural services performed with respect to constructing real property.
71.28(5n)(a)8.e. e. Income from the sale of food and beverages prepared by the claimant at a retail establishment.
71.28(5n)(a)8.f. f. Income from the lease, rental, license, sale, exchange, or other disposition of land.
71.28(5n)(a)9. 9. "Qualified production property" means either of the following:
71.28(5n)(a)9.a. a. Tangible personal property manufactured in whole or in part by the claimant on property that is assessed as manufacturing property under s. 70.995.
71.28(5n)(a)9.b. b. Tangible personal property produced, grown, or extracted in whole or in part by the claimant on or from property assessed as agricultural property under s. 70.32 (2) (a) 4.
71.28(5n)(b) (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of the tax, an amount equal to one of the following percentages of the claimant's eligible qualified production activities income in the taxable year:
71.28(5n)(b)1. 1. For taxable years beginning after December 31, 2012, and before January 1, 2014, 1.875 percent.
71.28(5n)(b)2. 2. For taxable years beginning after December 31, 2013, and before January 1, 2015, 3.75 percent.
71.28(5n)(b)3. 3. For taxable years beginning after December 31, 2014, and before January 1, 2016, 5.526 percent.
71.28(5n)(b)4. 4. For taxable years beginning after December 31, 2015, 7.5 percent.
71.28(5n)(c) (c) Limitations. 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 share of the income described under par. (b). 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 interests.
71.28(5n)(d) (d) Administration.
71.28(5n)(d)1.1. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.
71.28(5n)(d)2. 2. Except as provided in subd. 3., for purposes of determining a claimant's eligible qualified production activities income under this subsection, the claimant shall multiply the claimant's qualified production activities income from property manufactured by the claimant by the manufacturing property factor and qualified production activities income from property produced, grown, or extracted by the claimant by the agriculture property factor.
71.28(5n)(d)3. 3. The amount of the eligible qualified production activities income that a claimant may claim in computing the credit under par. (b) is the lesser of the following:
71.28(5n)(d)3.a. a. The eligible qualified production activities income determined under subd. 2.
71.28(5n)(d)3.b. b. Income apportioned to this state under s. 71.25 (5), (6), and (6m).
71.28(5n)(d)3.c. c. Income determined to be taxable under s. 71.255 (2).
71.28(5r) (5r)Postsecondary education credit.
71.28(5r)(a)(a) Definitions. In this subsection:
71.28(5r)(a)1. 1. "Claimant" means a corporation that files a claim under this subsection.
71.28(5r)(a)2. 2. "Course of instruction" has the meaning given in s. 38.50 (1) (c).
71.28(5r)(a)3. 3. "Family member" has the meaning given in s. 157.061 (7).
71.28(5r)(a)4. 4. "Managing employee" means an individual who wholly or partially exercises operational or managerial control over, or who directly or indirectly conducts, the operation of the claimant's business.
71.28(5r)(a)5. 5. "Paid or incurred" includes any amount paid by the claimant to reimburse an individual for the tuition that the individual paid or incurred.
71.28(5r)(a)6. 6. "Qualified postsecondary institution" means all of the following:
71.28(5r)(a)6.a. a. A University of Wisconsin System institution, a technical college system institution, or a regionally accredited 4-year nonprofit college or university having its regional headquarters and principal place of business in this state.
71.28(5r)(a)6.b. b. A school approved under s. 38.50, if the delivery of education occurs in this state.
71.28(5r)(b) (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23 an amount equal to the following:
71.28(5r)(b)1. 1. Twenty-five percent of the tuition that the claimant paid or incurred for an individual to participate in an education program of a qualified postsecondary institution, if the individual was enrolled in a course of instruction and eligible for a grant from the Federal Pell Grant Program.
71.28(5r)(b)2. 2. Thirty percent of the tuition that the claimant paid or incurred for an individual to participate in an education program of a qualified postsecondary institution, if the individual was enrolled in a course of instruction that relates to a projected worker shortage in this state, as determined by the local workforce development boards established under 29 USC 2832, and if the individual was eligible for a grant from the Federal Pell Grant Program.
71.28(5r)(c) (c) Limitations.
71.28(5r)(c)1.1. No credit may be allowed under par. (b) unless the claimant certifies to the department of revenue that the claimant will not be reimbursed for any amount of tuition for which the claimant claims a credit under par. (b).
71.28(5r)(c)2. 2. A claimant may not claim the credit under par. (b) for any tuition amounts that the individual described under par. (b) excluded under section 127 of the Internal Revenue Code.
71.28(5r)(c)3. 3. A claimant may not claim the credit under par. (b) for any tuition amounts that the claimant paid or incurred for a family member of a managing employee unless all of the following apply:
71.28(5r)(c)3.a. a. The family member was employed an average of at least 20 hours per week as an employee of the claimant, or the claimant's business, during the one-year period prior to commencing participation in the education program in connection with which the claimant claims a credit under par. (b).
71.28(5r)(c)3.b. b. The family member is enrolled in a course of instruction that is substantially related to the claimant's business.
71.28(5r)(c)3m. 3m. A claimant may not claim the credit under par. (b) for any tuition amounts that the claimant paid or incurred for an individual who is not a resident of this state.
71.28(5r)(c)4. 4. The claimant shall claim the credit for the taxable year in which the individual graduates from a course of instruction in an amount equal to the total amount the claimant paid or incurred under par. (b) for all taxable years in which the claimant paid or incurred such amounts related to that individual.
71.28(5r)(c)5. 5. 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 tuition under par. (b). 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.
71.28(5r)(d) (d) Administration.
71.28(5r)(d)1.1. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.
71.28(5r)(d)2. 2. No credit may be claimed under this subsection for taxable years beginning after December 31, 2013. Credits under this subsection for taxable years that begin before January 1, 2014, may be carried forward to taxable years that begin after December 31, 2013.
71.28(5rm) (5rm)Water consumption credit.
71.28(5rm)(a)(a) Definitions. In this subsection:
71.28(5rm)(a)1. 1. "Ccf" means 100 cubic feet.
71.28(5rm)(a)2. 2. "Claimant" means a person who files a claim under this subsection, who is an industrial customer of a municipal water utility that is located in a federal renewal community zone in this state, and whose average annual water consumption from that utility for a 24-month period exceeds 1,000,000 Ccf.
71.28(5rm)(b) (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2009, and before January 1, 2014, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of the tax, the amount determined as follows, except that the maximum amount that a claimant may claim in a taxable year under this subsection is $300,000:
71.28(5rm)(b)1. 1. Subtract the claimant's 2009 water usage costs from the claimant's water usage costs for the taxable year.
71.28(5rm)(b)2. 2. If the amount determined under subd. 1. is a positive number, multiply that amount by 0.50.
71.28(5rm)(c) (c) Limitations. 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 amounts under par. (b). 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 interests.
71.28(5rm)(d) (d) Administration.
71.28(5rm)(d)1.1. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.
71.28(5rm)(d)2. 2. No credit may be claimed under this subsection for taxable years beginning after December 31, 2013. Credits under this subsection for taxable years that begin before January 1, 2014, may be carried forward to taxable years that begin after December 31, 2013.
71.28(6) (6)Supplement to federal historic rehabilitation credit.
71.28(6)(a)1m.1m. For taxable years beginning before January 1, 2014, any person may credit against taxes otherwise due under this chapter, up to the amount of those taxes, an amount equal to 5 percent, for taxable years beginning before January 1, 2013, or 10 percent, for taxable years beginning after December 31, 2012, and before January 1, 2014, of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for certified historic structures on property located in this state if the physical work of construction or destruction in preparation for construction begins after December 31, 1988, and the rehabilitated property is placed in service after June 30, 1989, and before January 1, 2014.
71.28(6)(a)2m. 2m. For taxable years beginning after December 31, 2013, any person may claim as a credit against taxes otherwise due under s. 71.23, up to the amount of those taxes, an amount equal to 20 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for certified historic structures on property located in this state, if the cost of the person's qualified rehabilitation expenditures is at least $50,000 and the rehabilitated property is placed in service after December 31, 2013.
71.28(6)(a)3. 3. For taxable years beginning after December 31, 2013, any person may claim as a credit against taxes otherwise due under s. 71.23, up to the amount of those taxes, an amount equal to 20 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for qualified rehabilitated buildings, as defined in section 47 (c) (1) of the Internal Revenue Code, on property located in this state, if the cost of the person's qualified rehabilitation expenditures is at least $50,000 and the rehabilitated property is placed in service after December 31, 2013, and regardless of whether the rehabilitated property is used for multiple or revenue-producing purposes. No credit may be claimed under this subdivision for property listed as a contributing building in the state register of historic places or in the national register of historic places and no credit may be claimed under this subdivision for nonhistoric, nonresidential property converted into housing if the property has been previously used for housing.
71.28(6)(c) (c) No person may claim the credit under par. (a) 2m. unless the claimant includes with the claimant's return a copy of the claimant's certification under s. 238.17. For certification purposes under s. 238.17, the claimant shall provide to the Wisconsin Economic Development Corporation all of the following:
71.28(6)(c)1. 1. Evidence that the rehabilitation was recommended by the state historic preservation officer for approval by the secretary of the interior under 36 CFR 67.6 before the physical work of construction, or destruction in preparation for construction, began and that the rehabilitation was approved by the state historic preservation officer.
71.28(6)(c)2. 2. Evidence that the taxpayer obtained written certification from the state historic preservation officer that:
71.28(6)(c)2.a. a. The property is listed on the national register of historic places in Wisconsin or the state register of historic places, or is determined by the state historical society to be eligible for listing on the national register of historic places in Wisconsin or the state register of historic places, or is located in a historic district that is listed in the national register of historic places in Wisconsin or the state register of historic places and is certified by the state historic preservation officer as being of historic significance to the district, or is an outbuilding of an otherwise eligible property certified by the state historic preservation officer as contributing to the historic significance of the property.
71.28(6)(c)2.b. b. The proposed preservation or rehabilitation plan complies with standards promulgated under s. 44.02 (24) and the completed preservation or rehabilitation substantially complies with the proposed plan.
71.28(6)(c)2.c. c. The costs are not incurred to acquire any building or interest in a building or to enlarge an existing building.
71.28(6)(c)2.d. d. The costs were not incurred before the state historical society approved the proposed preservation or rehabilitation plan.
71.28(6)(cm) (cm) Any credit claimed under this subsection for Wisconsin purposes shall be claimed at the same time as for federal purposes.
71.28(6)(d) (d) The Wisconsin adjusted basis of the building shall be reduced by the amount of any credit awarded under this subsection. The Wisconsin adjusted basis of a partner's interest in a partnership, of a member's interest in a limited liability company or of stock in a tax-option corporation shall be adjusted to take into account adjustments made under this paragraph.
71.28(6)(e) (e) The provisions of sub. (4) (e), (f), (g) and (h), as they apply to the credit under that subsection, apply to the credit under this subsection.
71.28(6)(f) (f) A partnership, limited liability company, or tax-option corporation may not claim the credit under this subsection. The partners of a partnership, members of a limited liability company, or shareholders in a tax-option corporation may claim the credit under this subsection based on eligible costs incurred by the partnership, limited liability company, or tax-option corporation. The partnership, limited liability company, or tax-option corporation shall calculate the amount of the credit which may be claimed by each partner, member, or shareholder and shall provide that information to the partner, member, or shareholder. For shareholders of a tax-option corporation, the credit may be allocated in proportion to the ownership interest of each shareholder. Credits computed by a partnership or limited liability company may be claimed in proportion to the ownership interests of the partners or members or allocated to partners or members as provided in a written agreement among the partners or members that is entered into no later than the last day of the taxable year of the partnership or limited liability company, for which the credit is claimed. For a partnership or limited liability company that places property in service after June 29, 2008, and before January 1, 2009, the credit attributable to such property may be allocated, at the election of the partnership or limited liability company, to partners or members for a taxable year of the partnership or limited liability company that ends after June 29, 2008, and before January 1, 2010. Any partner or member who claims the credit as provided under this paragraph shall attach a copy of the agreement, if applicable, to the tax return on which the credit is claimed. A person claiming the credit as provided under this paragraph is solely responsible for any tax liability arising from a dispute with the department of revenue related to claiming the credit.
71.28(6)(g)1.1. If a person who claims the credit under this subsection elects to claim the credit based on claiming amounts for expenditures as the expenditures are paid, rather than when the rehabilitation work is completed, the person shall file an election form with the department, in the manner prescribed by the department.
71.28(6)(g)2. 2. Notwithstanding s. 71.77, the department may adjust or disallow the credit claimed under this subsection within 4 years after the date that the state historical society notifies the department that the expenditures for which the credit was claimed do not comply with the standards for certification promulgated under s. 44.02 (24). If the department adjusts or disallows, in whole or in part, a credit transferred under par. (h), only the person who originally transferred the credit to another person is liable to repay the adjusted or disallowed amount.
71.28(6)(h) (h) Any person, including a nonprofit entity described in section 501 (c) (3) of the Internal Revenue Code, may sell or otherwise transfer the credit under par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes imposed under s. 71.02, 71.08, 71.23, or 71.43, if the person notifies the department of the transfer, and submits with the notification a copy of the transfer documents, and the department certifies ownership of the credit with each transfer.
71.28(6n) (6n)Veteran employment credit.
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2011-12 Wisconsin Statutes updated though 2013 Wis. Act 200 and all Supreme Court Orders entered before April 18, 2014. Published and certified under s. 35.18. Changes effective after April 18, 2014 are designated by NOTES. (Published 4-18-14)