February 13, 2007 - Introduced by Representatives Wieckert, A. Ott, Musser,
Hahn, Lothian, Petrowski, Townsend and F. Lasee, cosponsored by Senators
Plale, Schultz, Darling and Roessler. Referred to Committee on Colleges
and Universities.
AB65,1,10
1An Act to renumber 231.01 (4m) (a) and (b);
to amend 71.05 (6) (a) 15., 71.21
2(4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2) (a) 10., 77.92 (4), 231.01 (4m) (intro.) and
3231.01 (5w); and
to create 71.07 (6f), 71.10 (4) (cf), 71.28 (6f), 71.30 (3) (dn),
471.47 (6f), 71.49 (1) (dn) and 231.01 (4m) (bm) of the statutes;
relating to:
5creating a nonrefundable individual and corporate income tax credit based on
6interest received from bonds or notes issued by the Wisconsin Health and
7Educational Facilities Authority for purposes related to an educational facility
8and authorizing the Wisconsin Health and Educational Facilities Authority to
9issue bonds to finance a project undertaken by the Wisconsin Association of
10Independent Colleges and Universities related to an educational facility.
Analysis by the Legislative Reference Bureau
Under current law, the Wisconsin Health and Educational Facilities Authority
(WHEFA) may issue bonds to finance any project undertaken by an educational
institution for an educational facility. This bill creates a nonrefundable individual
income tax credit for the amount of interest income received by a claimant (an
individual, a sole proprietor, a partner of a partnership, a member of a limited
liability company, or a shareholder of a tax-option corporation), multiplied by the
claimant's marginal tax rate, on bonds issued by WHEFA, on or after the effective
date of the bill, to finance any project undertaken for an educational facility.
The bill also creates a nonrefundable corporate income and franchise tax credit,
for 7.9 percent of the interest income received by corporations on bonds to which the
individual income tax credit applies.
An educational institution is currently defined to mean a corporation, agency,
or association that is authorized by state law to provide or operate an educational
facility. The bill expands that definition to include the Wisconsin Association of
Independent Colleges and Universities. An educational facility is currently defined
to mean a private, nonprofit, regionally accredited, postsecondary educational
institution. The bill expands that definition to include an institution, place, building,
or other structure used by the Wisconsin Association of Independent Colleges and
Universities solely for providing one or more supporting services to one or more
educational institutions.
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:
AB65, s. 1
1Section
1. 71.05 (6) (a) 15. of the statutes is amended to read:
AB65,2,62
71.05
(6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
3(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), (5b), (5d),
and 4(5e), (5f),
and (5h)
, and (6f) and not passed through by a partnership, limited liability
5company, or tax-option corporation that has added that amount to the partnership's,
6company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).
AB65, s. 2
7Section
2. 71.07 (6f) of the statutes is created to read:
AB65,2,98
71.07
(6f) WHEFA educational facility bond tax credit. (a)
Definitions. In
9this subsection:
AB65,2,1310
1. "Bond" means a bond or note issued by the Wisconsin Health and
11Educational Facilities Authority under s. 231.03 (6) (c), on or after the effective date
12of this subdivision .... [revisor inserts date], to finance any project undertaken for an
13educational facility.
AB65,3,3
12. "Claimant" means an individual, a sole proprietor, a partner, a member of
2a limited liability company, or a shareholder of a tax-option corporation who owns
3a bond and who files a claim under this subsection.
AB65,3,84
(b)
Filing claims. Subject to the limitations provided in this subsection, a
5claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08, up
6to the amount of those taxes, the interest received from a bond in the taxable year
7to which the claim under this subsection relates, multiplied by the claimant's
8marginal tax rate.
AB65,3,109
(c)
Limitations. 1. No credit may be allowed under this subsection unless it
10is claimed within the time period under s. 71.75 (2).
AB65,3,2011
2. For a claimant who is an individual, who is a part-year resident of this state,
12and who is a single person or a married person filing a separate return, multiply the
13credit for which the claimant is eligible under par. (b) by a fraction the numerator of
14which is the individual's Wisconsin adjusted gross income and the denominator of
15which is the individual's federal adjusted gross income. If a claimant is married and
16files a joint return, and if the claimant or the claimant's spouse, or both, are
17part-year residents of this state, multiply the credit for which the claimant is eligible
18under par. (b) by a fraction the numerator of which is the couple's joint Wisconsin
19adjusted gross income and the denominator of which is the couple's joint federal
20adjusted gross income.
AB65,4,221
3. Partnerships, limited liability companies, and tax-option corporations may
22not claim the credit under this subsection, but the eligibility for, and the amount of,
23the credit that may be claimed by each of their partners, members, or shareholders
24are based on their receipt of interest under par. (b). A partnership, limited liability
25company, or tax-option corporation shall compute the amount of interest income that
1each of its partners, members, or shareholders may claim, based on the proportion
2of their ownership interest, and shall provide that information to each of them.
AB65,4,43
(d)
Administration. Subsection (9e) (d), to the extent that it applies to the credit
4under that subsection, applies to the credit under this subsection.
AB65, s. 3
5Section
3. 71.10 (4) (cf) of the statutes is created to read:
AB65,4,76
71.10
(4) (cf) The Wisconsin Health and Educational Facilities Authority
7educational facility bond tax credit under s. 71.07 (6f).
AB65, s. 4
8Section
4. 71.21 (4) of the statutes is amended to read:
AB65,4,119
71.21
(4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
10(2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), (5b), (5e), (5f), (5g),
and (5h)
,
11and (6f) and passed through to partners shall be added to the partnership's income.
AB65, s. 5
12Section
5. 71.26 (2) (a) of the statutes is amended to read:
AB65,5,513
71.26
(2) (a)
Corporations in general. The "net income" of a corporation means
14the gross income as computed under the Internal Revenue Code as modified under
15sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
16computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c)
177., the amount of the credit under s. 71.28 (3) that the taxpayer added to income
18under this paragraph at the time that the taxpayer first claimed the credit plus the
19amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm),
20(1ds), (1dx), (3g), (3n), (3t), (3w), (5b), (5e), (5f), (5g),
and (5h)
, and (6f) and not passed
21through by a partnership, limited liability company, or tax-option corporation that
22has added that amount to the partnership's, limited liability company's, or
23tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus the amount
24of losses from the sale or other disposition of assets the gain from which would be
25wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise
1disposed of at a gain and minus deductions, as computed under the Internal Revenue
2Code as modified under sub. (3), plus or minus, as appropriate, an amount equal to
3the difference between the federal basis and Wisconsin basis of any asset sold,
4exchanged, abandoned, or otherwise disposed of in a taxable transaction during the
5taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).
AB65, s. 6
6Section
6. 71.28 (6f) of the statutes is created to read:
AB65,5,87
71.28
(6f) WHEFA educational facility bond tax credit. (a)
Definitions. In
8this subsection:
AB65,5,129
1. "Bond" means a bond or note issued by the Wisconsin Health and
10Educational Facilities Authority under s. 231.03 (6), on or after the effective date of
11this subdivision .... [revisor inserts date], to finance any project undertaken for an
12educational facility.
AB65,5,1413
2. "Claimant" means a corporation that owns a bond and that files a claim
14under this subsection.
AB65,5,1815
(b)
Filing claims. Subject to the limitations provided in this subsection, a
16claimant may claim as a credit against the tax imposed under s. 71.23, up to the
17amount of those taxes, 7.9 percent of the interest received from a bond in the taxable
18year to which the claim under this subsection relates.
AB65,5,2019
(c)
Limitations. 1. No credit may be allowed under this subsection unless it
20is claimed within the time period under s. 71.75 (2).
AB65,6,221
2. Partnerships, limited liability companies, and tax-option corporations may
22not claim the credit under this subsection, but the eligibility for, and the amount of,
23the credit that may be claimed by each of their partners, members, or shareholders
24are based on their receipt of interest under par. (b). A partnership, limited liability
25company, or tax-option corporation shall compute the amount of interest income that
1each of its partners, members, or shareholders may claim, based on the proportion
2of their ownership interest, and shall provide that information to each of them.
AB65,6,43
3. Subsection (4) (e) and (f), to the extent that it applies to the credit under that
4subsection, applies to the credit under this subsection.
AB65,6,65
(d)
Administration. Subsection (4) (g), to the extent that it applies to the credit
6under that subsection, applies to the credit under this subsection.
AB65, s. 7
7Section
7. 71.30 (3) (dn) of the statutes is created to read:
AB65,6,98
71.30
(3) (dn) The Wisconsin Health and Educational Facilities Authority
9educational facility bond credit under s. 71.28 (6f).
AB65, s. 8
10Section
8. 71.34 (1) (g) of the statutes is amended to read:
AB65,6,1411
71.34
(1) (g) An addition shall be made for credits computed by a tax-option
12corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), (3g),
13(3n), (3t), (3w), (5b), (5e), (5f), (5g),
and (5h)
, and (6f) and passed through to
14shareholders.
AB65, s. 9
15Section
9. 71.45 (2) (a) 10. of the statutes is amended to read:
AB65,6,2116
71.45
(2) (a) 10. By adding to federal taxable income the amount of credit
17computed under s. 71.47 (1dd) to (1dx), (3n), (3w), (5b), (5e), (5f), (5g),
and (5h)
, and
18(6f) and not passed through by a partnership, limited liability company, or tax-option
19corporation that has added that amount to the partnership's, limited liability
20company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) and
21the amount of credit computed under s. 71.47 (1), (3), (3t), (4), and (5).
AB65, s. 10
22Section
10. 71.47 (6f) of the statutes is created to read:
AB65,6,2423
71.47
(6f) WHEFA educational facility bond tax credit. (a)
Definitions. In
24this subsection:
AB65,7,4
11. "Bond" means a bond or note issued by the Wisconsin Health and
2Educational Facilities Authority under s. 231.03 (6), on or after the effective date of
3this subdivision .... [revisor inserts date], to finance any project undertaken for an
4educational facility.
AB65,7,65
2. "Claimant" means a corporation that owns a bond and that files a claim
6under this subsection.
AB65,7,107
(b)
Filing claims. Subject to the limitations provided in this subsection, a
8claimant may claim as a credit against the tax imposed under s. 71.43, up to the
9amount of those taxes, 7.9 percent of the interest received from a bond in the taxable
10year to which the claim under this subsection relates.
AB65,7,1211
(c)
Limitations. 1. No credit may be allowed under this subsection unless it
12is claimed within the time period under s. 71.75 (2).
AB65,7,1913
2. Partnerships, limited liability companies, and tax-option corporations may
14not claim the credit under this subsection, but the eligibility for, and the amount of,
15the credit that may be claimed by each of their partners, members, or shareholders
16are based on their receipt of interest under par. (b). A partnership, limited liability
17company, or tax-option corporation shall compute the amount of interest income that
18each of its partners, members, or shareholders may claim, based on the proportions
19of their ownership interest, and shall provide that information to each of them.
AB65,7,2120
3. Section 71.28 (4) (e) and (f), to the extent that it applies to the credit under
21that section, applies to the credit under this subsection.
AB65,7,2322
(d)
Administration. Section 71.28 (4) (g), to the extent that it applies to the
23credit under that section, applies to the credit under this subsection.
AB65, s. 11
24Section
11. 71.49 (1) (dn) of the statutes is created to read:
AB65,8,2
171.49
(1) (dn) The Wisconsin Health and Educational Facilities Authority
2educational facility bond credit under s. 71.47 (6f).
AB65, s. 12
3Section
12. 77.92 (4) of the statutes is amended to read:
AB65,8,184
77.92
(4) "Net business income," with respect to a partnership, means taxable
5income as calculated under section
703 of the Internal Revenue Code; plus the items
6of income and gain under section
702 of the Internal Revenue Code, including taxable
7state and municipal bond interest and excluding nontaxable interest income or
8dividend income from federal government obligations; minus the items of loss and
9deduction under section
702 of the Internal Revenue Code, except items that are not
10deductible under s. 71.21; plus guaranteed payments to partners under section
707 11(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
12(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3s), (3n), (3t), (3w), (5b), (5e), (5f),
13(5g),
and (5h)
, and (6f); and plus or minus, as appropriate, transitional adjustments,
14depreciation differences, and basis differences under s. 71.05 (13), (15), (16), (17), and
15(19); but excluding income, gain, loss, and deductions from farming. "Net business
16income," with respect to a natural person, estate, or trust, means profit from a trade
17or business for federal income tax purposes and includes net income derived as an
18employee as defined in section
3121 (d) (3) of the Internal Revenue Code.
AB65, s. 13
19Section
13. 231.01 (4m) (intro.) of the statutes is amended to read:
AB65,8,2020
231.01
(4m) (intro.) "Educational facility" means
a any of the following:
AB65,8,24
21(am) A facility used for education by a private institution that is described in
22section
501 (c) (3) of the Internal Revenue Code
, as defined in s. 71.22 (4), and that
23is exempt from federal taxation under section
501 (a) of the Internal Revenue Code,
24and that satisfies any of the following:
AB65, s. 14
1Section
14. 231.01 (4m) (a) and (b) of the statutes are renumbered 231.01 (4m)
2(am) 1. and 2.
AB65, s. 15
3Section
15. 231.01 (4m) (bm) of the statutes is created to read:
AB65,9,64
231.01
(4m) (bm) An institution, place, building, or other structure used by the
5Wisconsin Association of Independent Colleges and Universities solely for providing
6one or more supporting services to one or more institutions specified in par. (am).
AB65, s. 16
7Section
16. 231.01 (5w) of the statutes is amended to read:
AB65,9,148
231.01
(5w) "Participating educational institution" means
the Wisconsin
9Association of Independent Colleges and Universities or a corporation, agency
, or
10association
which that is authorized by state law to provide or operate an educational
11facility
and which, if the Wisconsin Association of Independent Colleges and
12Universities or the corporation, agency, or association undertakes the financing and
13construction or acquisition of a project or undertakes the refunding or refinancing
14of obligations or of a mortgage or of advances as provided in this chapter.
AB65,9,2416
(1) The treatment of sections 71.05 (6) (a) 15., 71.07 (6f), 71.10 (4) (cf), 71.21 (4),
1771.26 (2) (a), 71.28 (6f), 71.30 (3) (dn), 71.34 (1) (g), 71.45 (2) (a) 10., 71.47 (6f), 71.49
18(1) (dn), and 77.92 (4) of the statutes first applies to taxable years beginning on
19January 1 of the year in which this subsection takes effect, except that if this
20subsection takes effect after July 31 the treatment of sections 71.05 (6) (a) 15., 71.07
21(6f), 71.10 (4) (cf), 71.21 (4), 71.26 (2) (a), 71.28 (6f), 71.30 (3) (dn), 71.34 (1) (g), 71.45
22(2) (a) 10., 71.47 (6f), 71.49 (1) (dn), and 77.92 (4) of the statutes first applies to
23taxable years beginning on January 1 of the year following the year in which this
24subsection takes effect.
