LRB-4174/5
JK:wlj:jf
1999 - 2000 LEGISLATURE
March 13, 2000 - Introduced by Representatives Vrakas, Riley, Jensen,
Meyerhofer, Montgomery, Schooff, Hundertmark, Reynolds, Suder,
Staskunas, Petrowski, Plouff, Leibham, Plale, Rhoades, La Fave, Pettis,
Boyle, Kestell, Nass, Kaufert, Seratti, Olsen, M. Lehman, Ladwig,
Gunderson, Stone, Sykora, Spillner, Wieckert, Albers, Musser, Walker,
Hutchison, Owens, Lassa, Porter and F. Lasee, cosponsored by Senators
Grobschmidt, Farrow, Baumgart, Rosenzweig, Wirch, Darling, Burke,
Plache and Breske. Referred to Committee on Labor and Employment.
AB875,1,4
1An Act to amend 71.05 (6) (a) 15., 71.26 (2) (a), 71.45 (2) (a) 10. and 77.92 (4);
2and
to create 71.07 (5d), 71.10 (4) (cp), 71.28 (5d), 71.30 (3) (dm), 71.47 (5d) and
371.49 (1) (dm) of the statutes;
relating to: an income tax and franchise tax
4credit for wages paid to an apprentice.
Analysis by the Legislative Reference Bureau
This bill creates an income tax and franchise tax credit for a business that pays
wages to an apprentice, if the apprentice is participating in a two-year to five-year
apprenticeship program for construction, industrial or manufacturing trades. The
amount of the credit is 7% of the wages that are paid to an apprentice in a taxable
year, but cannot exceed $1,400, except that, in the taxable year in which the
apprentice completes the apprenticeship program, the amount of the credit is 10%
of the wages that are paid to an apprentice, but cannot exceed $3,000.
Partnerships, limited liability companies and tax-option corporations compute
the credit but pass it on to the partners, members and shareholders in proportion to
their ownership interests. If the credit exceeds the business's tax liability, the state
will not issue a refund check, but the credit may be carried forward to later taxable
years.
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:
AB875, s. 1
1Section
1. 71.05 (6) (a) 15. of the statutes is amended to read:
AB875,2,62
71.05
(6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
3(2di), (2dj), (2dL), (2dr), (2ds), (2dx)
and, (3s)
and (5d) and not passed through by a
4partnership, limited liability company or tax-option corporation that has added that
5amount to the partnership's, company's or tax-option corporation's income under s.
671.21 (4) or 71.34 (1) (g).
AB875, s. 2
7Section
2. 71.07 (5d) of the statutes is created to read:
AB875,2,88
71.07
(5d) Apprenticeship credit. (a) In this subsection:
AB875,2,99
1. "Claimant" means a person who files a claim under this subsection.
AB875,2,1210
2. "Apprentice" means a person who participates in a 2-year to 5-year
11apprenticeship program for construction, industrial or manufacturing trades, as
12determined and approved by the department of workforce development.
AB875,2,1913
(b) Subject to the limitations provided in this subsection, a claimant may claim
14as a credit against the taxes imposed under s. 71.02 an amount that is equal to 7%
15of the wages that the claimant paid to an apprentice in the taxable year, but not to
16exceed $1,400, except that a claimant may claim as a credit against the taxes imposed
17under s. 71.02 an amount that is equal to 10% of the wages that the claimant paid
18to an apprentice in the taxable year in which the apprentice completes an
19apprenticeship program, but not to exceed $3,000.
AB875,2,2120
(c) The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit
21under s. 71.28 (4), apply to the credit under this subsection.
AB875,3,8
1(d) Partnerships, limited liability companies and tax-option corporations may
2not claim the credit under this subsection, but the eligibility for, and the amount of,
3the credit are based on their payment of wages under par. (b). A partnership, limited
4liability company or tax-option corporation shall compute the amount of credit that
5each of its partners, members or shareholders may claim and shall provide that
6information to each of them. Partners, members of limited liability companies and
7shareholders of tax-option corporations may claim the credit in proportion to their
8ownership interests.
AB875,3,109
(e) Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4),
10applies to the credit under this subsection.
AB875, s. 3
11Section
3. 71.10 (4) (cp) of the statutes is created to read:
AB875,3,1212
71.10
(4) (cp) The apprenticeship credit under s. 71.07 (5d).
AB875, s. 4
13Section
4. 71.26 (2) (a) of the statutes is amended to read:
AB875,4,314
71.26
(2) (a)
Corporations in general. The "net income" of a corporation means
15the gross income as computed under the internal revenue code as modified under
16sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
17computed under s. 71.28 (1) and (3) to (5) plus the amount of the credit computed
18under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds)
and
, (1dx)
and (5d) and not passed
19through by a partnership, limited liability company or tax-option corporation that
20has added that amount to the partnership's, limited liability company's or tax-option
21corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from
22the sale or other disposition of assets the gain from which would be wholly exempt
23income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at
24a gain and minus deductions, as computed under the internal revenue code as
25modified under sub. (3), plus or minus, as appropriate, an amount equal to the
1difference between the federal basis and Wisconsin basis of any asset sold,
2exchanged, abandoned or otherwise disposed of in a taxable transaction during the
3taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).
AB875, s. 5
4Section
5. 71.28 (5d) of the statutes is created to read:
AB875,4,55
71.28
(5d) Apprenticeship credit. (a) In this subsection:
AB875,4,66
1. "Claimant" means a person who files a claim under this subsection.
AB875,4,97
2. "Apprentice" means a person who participates in a 2-year to 5-year
8apprenticeship program for construction, industrial or manufacturing trades, as
9determined and approved by the department of workforce development.
AB875,4,1610
(b) Subject to the limitations provided in this subsection, a claimant may claim
11as a credit against the taxes imposed under s. 71.23 an amount that is equal to 7%
12of the wages that the claimant paid to an apprentice in the taxable year, but not to
13exceed $1,400, except that a claimant may claim as a credit against the taxes imposed
14under s. 71.23 an amount that is equal to 10% of the wages that the claimant paid
15to an apprentice in the taxable year in which the apprentice completes an
16apprenticeship program, but not to exceed $3,000.
AB875,4,1817
(c) The carry-over provisions of sub. (4) (e) and (f), as they apply to the credit
18under sub. (4), apply to the credit under this subsection.
AB875,5,219
(d) Partnerships, limited liability companies and tax-option corporations may
20not claim the credit under this subsection, but the eligibility for, and the amount of,
21the credit are based on their payment of wages under par. (b). A partnership, limited
22liability company or tax-option corporation shall compute the amount of credit that
23each of its partners, members or shareholders may claim and shall provide that
24information to each of them. Partners, members of limited liability companies and
1shareholders of tax-option corporations may claim the credit in proportion to their
2ownership interests.
AB875,5,43
(e) Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies
4to the credit under this subsection.
AB875, s. 6
5Section
6. 71.30 (3) (dm) of the statutes is created to read:
AB875,5,66
71.30
(3) (dm) The apprenticeship credit under s. 71.28 (5d).
AB875, s. 7
7Section
7. 71.45 (2) (a) 10. of the statutes is amended to read:
AB875,5,138
71.45
(2) (a) 10. By adding to federal taxable income the amount of credit
9computed under s. 71.47 (1dd) to (1dx)
and (5d) and not passed through by a
10partnership, limited liability company or tax-option corporation that has added that
11amount to the partnership's, limited liability company's or tax-option corporation's
12income under s. 71.21 (4) or 71.34 (1) (g) and the amount of credit computed under
13s. 71.47 (1), (3), (4) and (5).
AB875, s. 8
14Section
8. 71.47 (5d) of the statutes is created to read:
AB875,5,1515
71.47
(5d) Apprenticeship credit. (a) In this subsection:
AB875,5,1616
1. "Claimant" means a person who files a claim under this subsection.
AB875,5,1917
2. "Apprentice" means a person who participates in a 2-year to 5-year
18apprenticeship program for construction, industrial or manufacturing trades, as
19determined and approved by the department of workforce development.
AB875,6,220
(b) Subject to the limitations provided in this subsection, a claimant may claim
21as a credit against the taxes imposed under s. 71.43 an amount that is equal to 7%
22of the wages that the claimant paid to an apprentice in the taxable year, but not to
23exceed $1,400, except that a claimant may claim as a credit against the taxes imposed
24under s. 71.43 an amount that is equal to 10% of the wages that the claimant paid
1to an apprentice in the taxable year in which the apprentice completes an
2apprenticeship program, but not to exceed $3,000.
AB875,6,43
(c) The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit
4under s. 71.28 (4), apply to the credit under this subsection.
AB875,6,125
(d) Partnerships, limited liability companies and tax-option corporations may
6not claim the credit under this subsection, but the eligibility for, and the amount of,
7the credit are based on their payment of wages under par. (b). A partnership, limited
8liability company or tax-option corporation shall compute the amount of credit that
9each of its partners, members or shareholders may claim and shall provide that
10information to each of them. Partners, members of limited liability companies and
11shareholders of tax-option corporations may claim the credit in proportion to their
12ownership interests.
AB875,6,1413
(e) Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4),
14applies to the credit under this subsection.
AB875, s. 9
15Section
9. 71.49 (1) (dm) of the statutes is created to read:
AB875,6,1616
71.49
(1) (dm) The apprenticeship credit under s. 71.47 (5d).
AB875,7,819
77.92
(4) "Net business income", with respect to a partnership, means taxable
20income as calculated under section
703 of the Internal Revenue Code; plus the items
21of income and gain under section
702 of the Internal Revenue Code, including taxable
22state and municipal bond interest and excluding nontaxable interest income or
23dividend income from federal government obligations; minus the items of loss and
24deduction under section
702 of the Internal Revenue Code, except items that are not
25deductible under s. 71.21; plus guaranteed payments to partners under section
707
1(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
2(2di), (2dj), (2dL), (2dr), (2ds), (2dx)
and, (3s)
and (5d); and plus or minus, as
3appropriate, transitional adjustments, depreciation differences and basis
4differences under s. 71.05 (13), (15), (16), (17) and (19); but excluding income, gain,
5loss and deductions from farming. "Net business income", with respect to a natural
6person, estate or trust, means profit from a trade or business for federal income tax
7purposes and includes net income derived as an employe as defined in section
3121 8(d) (3) of the Internal Revenue Code.
