LRB-0339/1
MES/JK/MGG:kjf:nwn
2007 - 2008 LEGISLATURE
March 15, 2007 - Introduced by Representatives Friske, LeMahieu, Albers,
Lothian, Wood, Petrowski, Bies, A. Ott and Vos. Referred to Committee on
Forestry.
AB177,1,4
1An Act to create 71.05 (6) (b) 39., 71.26 (3) (hf) and 71.45 (2) (a) 16. of the
2statutes;
relating to: creating an individual income and corporate income and
3franchise tax deduction for a donation of a conservation easement to a unit of
4government.
Analysis by the Legislative Reference Bureau
This bill creates an individual income and corporate income and franchise tax
subtract modification, or deduction, for the fair market value (FMV) of a permanent
conservation easement on eligible land that a taxpayer donates to the state or to a
county. Under the bill, for a conservation easement to qualify, it must allow the
occurrence of hunting, fishing, hiking, sight-seeing, cross-country skiing, and
generally accepted forestry management practices and, in general, preclude
development of the land.
The maximum deduction, based on the FMV of the donated conservation
easement, that may be claimed is an amount of up to 50 percent of the taxpayer's
federal adjusted gross income (FAGI) or, if the taxpayer is a farmer or rancher, up to
100 percent of the taxpayer's FAGI. If the FMV of the claimant's donation exceeds
the maximum allowable amount of the claimant's deduction, the claimant may carry
forward any unused amount of the deduction for the next 15 taxable years.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
For further information see the state and local 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:
AB177, s. 1
1Section
1. 71.05 (6) (b) 39. of the statutes is created to read:
AB177,2,122
71.05
(6) (b) 39. The fair market value of a permanent conservation easement
3on eligible land that is donated by a claimant, in an amount of up to 50 percent of the
4claimant's federal adjusted gross income if the claimant is not a farmer or a rancher
5or up to 100 percent of the claimant's federal adjusted gross income if the claimant
6is a farmer or a rancher, to the state or to a county in this state, in the year in which
7the donation occurs. If the allowable amount of a claimant's subtraction under this
8subdivision exceeds the amount of the claimant's federal adjusted gross income, the
9claimant may carry forward the amount of the unused subtraction for the next 15
10taxable years and may subtract any unused amount as provided under this
11subdivision. In this subdivision, the following terms have the following meanings
12and the following conditions apply:
AB177,2,1513
a. "Claimant" means an individual who donates a permanent conservation
14easement on eligible land to the state or to a county in this state and who claims the
15subtraction under this subdivision.
AB177,2,1916
b. "Conservation easement" is an easement that has the meaning given in s.
17700.40 (1) (a) and that is an easement that allows the occurrence of outdoor
18nature-based recreational activities and generally accepted forestry management
19practices.
AB177,3,3
1c. "Eligible land" means a parcel of real property that is at least 10 contiguous
2acres as calculated under s. 77.82 (1) (a) 1. and that meets the percentage and the
3timber production requirements specified under s. 77.82 (1) (a) 2.
AB177,3,74
d. "Farmer or rancher" means an individual whose gross income from the trade
5or business of farming, as defined in section
2032A (e) (5) of the Internal Revenue
6Code, is greater than 50 percent of the individual's gross income in the taxable year
7to which the subtraction relates.
AB177,3,98
e. "Generally accepted forestry management practices" has the meaning given
9in s. 823.075 (1) (d).
AB177,3,1110
f. "Outdoor nature-based recreational activities" means hunting, fishing,
11hiking, sight-seeing, and cross-country skiing.
AB177, s. 2
12Section
2. 71.26 (3) (hf) of the statutes is created to read:
AB177,3,2413
71.26
(3) (hf) Section 170 is modified so that a claimant may subtract from
14income the fair market value of a permanent conservation easement on eligible land
15that is donated by the claimant, in an amount of up to 50 percent of the claimant's
16federal adjusted gross income if the claimant is not a farmer or a rancher or up to 100
17percent of the claimant's federal adjusted gross income if the claimant is a farmer or
18a rancher, to the state or to a county in this state, in the year in which the donation
19occurs. If the allowable amount of a claimant's subtraction under this paragraph
20exceeds the amount of the claimant's federal adjusted gross income, the claimant
21may carry forward the amount of the unused subtraction for the next 15 taxable
22years and may subtract any unused amount as provided under this paragraph. In
23this paragraph, the following terms have the following meanings and the following
24conditions apply:
AB177,4,3
11. "Claimant" means a corporation that donates a permanent conservation
2easement on eligible land to the state or to a county in this state and who claims the
3subtraction under this paragraph.
AB177,4,74
2. "Conservation easement" is an easement that has the meaning given in s.
5700.40 (1) (a) and that is an easement that allows the occurrence of outdoor
6nature-based recreational activities and generally accepted forestry management
7practices.
AB177,4,108
3. "Eligible land" means a parcel of real property that is at least 10 contiguous
9acres as calculated under s. 77.82 (1) (a) 1. and that meets the percentage and the
10timber production requirements specified under s. 77.82 (1) (a) 2.
AB177,4,1411
4. "Farmer or rancher" means a corporation that has gross income from the
12trade or business of farming, as defined in section
2032A (e) (5) of the Internal
13Revenue Code, in an amount that is greater than 50 percent of the corporation's gross
14income in the taxable year to which the subtraction relates.
AB177,4,1615
5. "Generally accepted forestry management practices" has the meaning given
16in s. 823.075 (1) (d).
AB177,4,1817
6. "Outdoor nature-based recreational activities" means hunting, fishing,
18hiking, sight-seeing, and cross-country skiing.
AB177, s. 3
19Section
3. 71.45 (2) (a) 16. of the statutes is created to read:
AB177,5,520
71.45
(2) (a) 16. By subtracting from federal taxable income the fair market
21value of a permanent conservation easement on eligible land that is donated by the
22claimant, in an amount of up to 50 percent of the claimant's federal adjusted gross
23income if the claimant is not a farmer or a rancher or up to 100 percent of the
24claimant's federal adjusted gross income if the claimant is a farmer or a rancher, to
25the state or to a county in this state, in the year in which the donation occurs. If the
1allowable amount of a claimant's subtraction under this subdivision exceeds the
2amount of the claimant's federal adjusted gross income, the claimant may carry
3forward the amount of the unused subtraction for the next 15 taxable years and may
4subtract any unused amount as provided under this subdivision. In this subdivision,
5the following terms have the following meanings and the following conditions apply:
AB177,5,86
a. "Claimant" means a corporation that donates a permanent conservation
7easement on eligible land to the state or to a county in this state and who claims the
8subtraction under this subdivision.
AB177,5,129
b. "Conservation easement" is an easement that has the meaning given in s.
10700.40 (1) (a) and that is an easement that allows the occurrence of outdoor
11nature-based recreational activities and generally accepted forestry management
12practices.
AB177,5,1513
c. "Eligible land" means a parcel of real property that is at least 10 contiguous
14acres as calculated under s. 77.82 (1) (a) 1. and that meets the percentage and the
15timber production requirements specified under s. 77.82 (1) (a) 2.
AB177,5,1916
d. "Farmer or rancher" means a corporation that has gross income from the
17trade or business of farming, as defined in section
2032A (e) (5) of the Internal
18Revenue Code, in an amount that is greater than 50 percent of the corporation's gross
19income in the taxable year to which the subtraction relates.
AB177,5,2120
e. "Generally accepted forestry management practices" has the meaning given
21in s. 823.075 (1) (d).
AB177,5,2322
f. "Outdoor nature-based recreational activities" means hunting, fishing,
23hiking, sight-seeing, and cross-country skiing.
AB177,6,4
1(1) This act first applies to taxable years beginning on January 1 of the year
2in which this subsection takes effect, except that if this subsection takes effect after
3July 31 this act first applies to taxable years beginning on January 1 of the year
4following the year in which this subsection takes effect.
