LRB-3423/1
JK:eev&wlj:jm
October 2013 Special Session
2013 - 2014 LEGISLATURE
October 15, 2013 - Introduced by Joint Committee on Finance, by request of
Governor Scott Walker. Referred to Joint Committee on Finance.
AB4,1,9 1An Act to repeal 71.07 (9m) (a) 1. and 2., 71.28 (6) (a) 1. and 2. and 71.47 (6) (a)
21. and 2.; to renumber 71.10 (4) (dm); to renumber and amend 71.07 (9m)
3(a) (intro.), 71.07 (9m) (c), 71.28 (6) (a) (intro.), 71.28 (6) (c), 71.47 (6) (a) (intro.)
4and 71.47 (6) (c); to amend 71.07 (9m) (g) 2., 71.08 (1) (intro.), 71.28 (6) (g) 2.
5and 71.47 (6) (g) 2.; and to create 71.07 (9m) (a) 2m., 71.07 (9m) (a) 3., 71.07
6(9m) (c) 2., 71.07 (9m) (h), 71.28 (6) (a) 2m., 71.28 (6) (a) 3., 71.28 (6) (c) 2., 71.28
7(6) (h), 71.47 (6) (a) 2m., 71.47 (6) (a) 3., 71.47 (6) (c) 2. and 71.47 (6) (h) of the
8statutes; relating to: increasing the amount of the supplement to the federal
9historic rehabilitation tax credit.
Analysis by the Legislative Reference Bureau
Under current law, a person may claim an income and franchise tax credit for
10 percent of the qualified rehabilitation expenditures, as defined under the federal
Internal Revenue Code, for certified historic structures on property located in this
state, if construction begins after December 31, 1988, and the rehabilitated property
is placed in service after June 30, 1989. The credit is a supplement to the federal tax
credit for 20 percent of the qualified rehabilitation expenditures for certified historic
structures. The federal credit, and the supplemental state credit, apply to
nonresidential real property and residential rental property.

Under this bill, a person may claim an income and franchise tax credit for 20
percent of the qualified rehabilitation expenses, as defined under the federal
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, 2012.
The bill also allows a person to claim a credit equal to 20 percent of the qualified
rehabilitation expenses for qualified rehabilitated buildings, as defined under the
federal Internal Revenue Code, located in this state. The credit is similar to the
federal credit for rehabilitating a building that was first placed in service before
1936, except that the federal credit is 10 percent of the qualified rehabilitation
expenses.
Under the bill, the Department of Revenue, in conjunction with the State
Historical Society, must submit a report to the Joint Committee on Finance (JCF),
no later than June 30, 2016, describing the economic impact of the tax credits and
making a recommendation as to whether the tax credits should continue. The
recommendation, however, may be implemented only upon approval of JCF.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB4,1 1Section 1. 71.07 (9m) (a) (intro.) of the statutes, as affected by 2013 Wisconsin
2Act 20
, is renumbered 71.07 (9m) (a) 1m. and amended to read:
AB4,2,103 71.07 (9m) (a) 1m. Any For taxable years beginning before January 1, 2013,
4any
person may credit against taxes otherwise due under this chapter, up to the
5amount of those taxes, an amount equal to one of the following percentages 5 percent
6of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2)
7of the Internal Revenue Code, for certified historic structures on property located in
8this state if the physical work of construction or destruction in preparation for
9construction begins after December 31, 1988, and the rehabilitated property is
10placed in service after June 30, 1989:, and before January 1, 2013.
AB4,2 11Section 2. 71.07 (9m) (a) 1. and 2. of the statutes, as created by 2013 Wisconsin
12Act 20
, are repealed.
AB4,3
1Section 3. 71.07 (9m) (a) 2m. of the statutes is created to read:
AB4,3,82 71.07 (9m) (a) 2m. For taxable years beginning after December 31, 2012, any
3person may claim as a credit against taxes otherwise due under s. 71.02 or 71.08, up
4to the amount of those taxes, an amount equal to 20 percent of the costs of qualified
5rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue
6Code, for certified historic structures on property located in this state, if the cost of
7the person's qualified rehabilitation expenditures is at least $50,000 and the
8rehabilitated property is placed in service after December 31, 2012.
AB4,4 9Section 4. 71.07 (9m) (a) 3. of the statutes is created to read:
AB4,3,2310 71.07 (9m) (a) 3. For taxable years beginning after December 31, 2012, any
11person may claim as a credit against taxes otherwise due under s. 71.02 or 71.08, up
12to the amount of those taxes, an amount equal to 20 percent of the costs of qualified
13rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue
14Code, for qualified rehabilitated buildings, as defined in section 47 (c) (1) of the
15Internal Revenue Code, on property located in this state, if the cost of the person's
16qualified rehabilitation expenditures is at least $50,000 and the rehabilitated
17property is placed in service after December 31, 2012, and regardless of whether the
18rehabilitated property is used for multiple or revenue-producing purposes. No
19credit may be claimed under this subdivision for property listed as a contributing
20building in the state register of historic places or in the national register of historic
21places and no credit may be claimed under this subdivision for nonhistoric,
22nonresidential property converted into housing if the property has been previously
23used for housing.
AB4,5 24Section 5. 71.07 (9m) (c) of the statutes is renumbered 71.07 (9m) (c) (intro.)
25and amended to read:
AB4,4,3
171.07 (9m) (c) (intro.) No person may claim the credit under this subsection par.
2(a) 2m.
unless the claimant includes with the claimant's return evidence each of the
3following:
AB4,4,8 41. Evidence that the rehabilitation was recommended by the state historic
5preservation officer for approval by the secretary of the interior under 36 CFR 67.6
6before the physical work of construction, or destruction in preparation for
7construction, began and that the rehabilitation was approved by the secretary of the
8interior under 36 CFR 67.6
state historic preservation officer.
AB4,6 9Section 6. 71.07 (9m) (c) 2. of the statutes is created to read:
AB4,4,1110 71.07 (9m) (c) 2. Evidence that the taxpayer obtained written certification from
11the state historic preservation officer that:
AB4,4,2012 a. The property is listed on the national register of historic places in Wisconsin
13or the state register of historic places, or is determined by the state historical society
14to be eligible for listing on the national register of historic places in Wisconsin or the
15state register of historic places, or is located in a historic district that is listed in the
16national register of historic places in Wisconsin or the state register of historic places
17and is certified by the state historic preservation officer as being of historic
18significance to the district, or is an outbuilding of an otherwise eligible property
19certified by the state historic preservation officer as contributing to the historic
20significance of the property.
AB4,4,2321 b. The proposed preservation or rehabilitation plan complies with standards
22promulgated under s. 44.02 (24) and the completed preservation or rehabilitation
23substantially complies with the proposed plan.
AB4,4,2524 c. The costs are not incurred to acquire any building or interest in a building
25or to enlarge an existing building.
AB4,5,2
1d. The costs were not incurred before the state historical society approved the
2proposed preservation or rehabilitation plan.
AB4,7 3Section 7. 71.07 (9m) (g) 2. of the statutes is amended to read:
AB4,5,104 71.07 (9m) (g) 2. Notwithstanding s. 71.77, the department may adjust or
5disallow the credit claimed under this subsection within 4 years after the date that
6the state historical society notifies the department that the expenditures for which
7the credit was claimed do not comply with the standards for certification
8promulgated under s. 44.02 (24). If the department adjusts or disallows, in whole or
9in part, a credit transferred under par. (h), only the person who originally transferred
10the credit to another person is liable to repay the adjusted or disallowed amount.
AB4,8 11Section 8. 71.07 (9m) (h) of the statutes is created to read:
AB4,5,1712 71.07 (9m) (h) Any person, including a nonprofit entity described in section 501
13(c) (3) of the Internal Revenue Code, may sell or otherwise transfer the credit under
14par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes
15imposed under s. 71.02, 71.08, 71.23, or 71.43, if the person notifies the department
16of the transfer, and submits with the notification a copy of the transfer documents,
17and the department certifies ownership of the credit with each transfer.
AB4,9 18Section 9. 71.08 (1) (intro.) of the statutes is amended to read:
AB4,6,319 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
20couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
21ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (3m), (3n), (3p),
22(3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (6), (6e), (8r),
23and (9e), and (9m) 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3),
24(3n), (3t), and (3w), 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3),
25(3n), (3t), and (3w), 71.57 to 71.61, and 71.613 and subch. VIII and payments to other

1states under s. 71.07 (7), is less than the tax under this section, there is imposed on
2that natural person, married couple filing jointly, trust or estate, instead of the tax
3under s. 71.02, an alternative minimum tax computed as follows:
AB4,10 4Section 10. 71.10 (4) (dm) of the statutes is renumbered 71.10 (4) (fm).
AB4,11 5Section 11. 71.28 (6) (a) (intro.) of the statutes, as affected by 2013 Wisconsin
6Act 20
, is renumbered 71.28 (6) (a) 1m. and amended to read:
AB4,6,147 71.28 (6) (a) 1m. Any For taxable years beginning before January 1, 2013, any
8person may credit against taxes otherwise due under this chapter, up to the amount
9of those taxes, an amount equal to one of the following percentages 5 percent of the
10costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the
11Internal Revenue Code, for certified historic structures on property located in this
12state if the physical work of construction or destruction in preparation for
13construction begins after December 31, 1988, and the rehabilitated property is
14placed in service after June 30, 1989:, and before January 1, 2013.
AB4,12 15Section 12. 71.28 (6) (a) 1. and 2. of the statutes, as created by 2013 Wisconsin
16Act 20
, are repealed.
AB4,13 17Section 13. 71.28 (6) (a) 2m. of the statutes is created to read:
AB4,6,2418 71.28 (6) (a) 2m. For taxable years beginning after December 31, 2012, any
19person may claim as a credit against taxes otherwise due under s. 71.23, up to the
20amount of those taxes, an amount equal to 20 percent of the costs of qualified
21rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue
22Code, for certified historic structures on property located in this state, if the cost of
23the person's qualified rehabilitation expenditures is at least $50,000 and the
24rehabilitated property is placed in service after December 31, 2012.
AB4,14 25Section 14. 71.28 (6) (a) 3. of the statutes is created to read:
AB4,7,14
171.28 (6) (a) 3. For taxable years beginning after December 31, 2012, any
2person may claim as a credit against taxes otherwise due under s. 71.23, up to the
3amount of those taxes, an amount equal to 20 percent of the costs of qualified
4rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue
5Code, for qualified rehabilitated buildings, as defined in section 47 (c) (1) of the
6Internal Revenue Code, on property located in this state, if the cost of the person's
7qualified rehabilitation expenditures is at least $50,000 and the rehabilitated
8property is placed in service after December 31, 2012, and regardless of whether the
9rehabilitated property is used for multiple or revenue-producing purposes. No
10credit may be claimed under this subdivision for property listed as a contributing
11building in the state register of historic places or in the national register of historic
12places and no credit may be claimed under this subdivision for nonhistoric,
13nonresidential property converted into housing if the property has been previously
14used for housing.
AB4,15 15Section 15. 71.28 (6) (c) of the statutes is renumbered 71.28 (6) (c) (intro.) and
16amended to read:
AB4,7,1917 71.28 (6) (c) (intro.) No person may claim the credit under this subsection par.
18(a) 2m.
unless the claimant includes with the claimant's return evidence each of the
19following:
AB4,7,24 201. Evidence that the rehabilitation was recommended by the state historic
21preservation officer for approval by the secretary of the interior under 36 CFR 67.6
22before the physical work of construction, or destruction in preparation for
23construction, began and that the rehabilitation was approved by the secretary of the
24interior under 36 CFR 67.6
state historic preservation officer.
AB4,16 25Section 16. 71.28 (6) (c) 2. of the statutes is created to read:
AB4,8,2
171.28 (6) (c) 2. Evidence that the taxpayer obtained written certification from
2the state historic preservation officer that:
AB4,8,113 a. The property is listed on the national register of historic places in Wisconsin
4or the state register of historic places, or is determined by the state historical society
5to be eligible for listing on the national register of historic places in Wisconsin or the
6state register of historic places, or is located in a historic district that is listed in the
7national register of historic places in Wisconsin or the state register of historic places
8and is certified by the state historic preservation officer as being of historic
9significance to the district, or is an outbuilding of an otherwise eligible property
10certified by the state historic preservation officer as contributing to the historic
11significance of the property.
AB4,8,1412 b. The proposed preservation or rehabilitation plan complies with standards
13promulgated under s. 44.02 (24) and the completed preservation or rehabilitation
14substantially complies with the proposed plan.
AB4,8,1615 c. The costs are not incurred to acquire any building or interest in a building
16or to enlarge an existing building.
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