LRB-2173/3
JK:jld:rs
2007 - 2008 LEGISLATURE
February 21, 2008 - Introduced by Representatives Fields, Turner, Molepske and
Grigsby. Referred to Committee on Ways and Means.
AB837,1,4
1An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2)
2(a) 10. and 77.92 (4); and
to create 71.07 (5c), 71.10 (4) (cn), 71.28 (5c), 71.30
3(3) (cn), 71.47 (5c) and 71.49 (1) (cn) of the statutes;
relating to: an income and
4franchise tax credit for hiring high school students for summer employment.
Analysis by the Legislative Reference Bureau
This bill creates an income and franchise tax credit for businesses that hire high
school students for summer employment. The credit is equal to the wages paid to an
employee who is a high school student, or who has just graduated from high school
and intends to go to college, during the period beginning on July 1 and ending on the
first Monday in September. For each student who works full time, the employer may
claim a credit not to exceed the lesser of $600 per month or 70 percent of the student's
monthly wage. For each student who works part time, the employer may claim a
credit not to exceed the lesser of $300 per month or 70 percent of the student's
monthly wage. The employer, however, may only claim the credit for wages paid to
a student whose most recent cumulative grade point average is at least 3.0 or the
equivalent. The maximum amount of the credits that an employer may claim in any
taxable year is $10,000. If the credit claimed by an employer exceeds the employer's
tax liability, the state will not issue a refund check, but the employer may carry
forward any remaining credit to subsequent 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:
AB837, s. 1
1Section
1. 71.05 (6) (a) 15. of the statutes is amended to read:
AB837,2,62
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),
(5c), (5d),
4and (5e), (5f), and (5h) 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).
AB837, s. 2
7Section
2. 71.07 (5c) of the statutes is created to read:
AB837,2,98
71.07
(5c) Youth summer employment credit. (a)
Definitions. In this
9subsection:
AB837,2,1010
1. "Claimant" means a person who files a claim under this subsection.
AB837,2,1111
2. "Full time" means at least 35 hours a week.
AB837,2,1212
3. "Part time" means less than 35 hours a week.
AB837,2,1613
(b)
Filing claims. Subject to the limitations provided in this subsection, a
14claimant may claim as a credit against the taxes imposed under s. 71.02, up to the
15amount of those taxes, an amount that is equal to the amount of the wages that the
16claimant paid in the taxable year to an employee, if all of the following apply:
AB837,2,1817
1. The claimant paid the wages for work performed during the period beginning
18on July 1 and ending on the first Monday in September of the taxable year.
AB837,2,1919
2. The employee is at least 15 years of age, but no more than 18 years of age.
AB837,3,220
3. The employee is either a high school student or graduates from high school
21during the taxable year prior to the first Monday in September and provides proof
1to the claimant that he or she is enrolled in a university or college located in this state
2and intends to begin instruction at the university or college in that taxable year.
AB837,3,43
4. The employee receives an hourly wage that is at least 20 percent more than
4the federal minimum hourly wage.
AB837,3,65
5. The student's most recent cumulative high school grade point average is at
6least 3.0 or the equivalent.
AB837,3,117
(c)
Limitations. 1. The maximum amount that a claimant may claim under this
8subsection in any taxable year for any single employee who works full time is an
9amount that is equal to the lesser of $600 for each month that the employee is
10employed during the period described under par. (b) or 70 percent of the employee's
11monthly wages during that period.
AB837,3,1612
2. The maximum amount that a claimant may claim under this subsection in
13any taxable year for any single employee who works part time is an amount that is
14equal to the lesser of $300 for each month that the employee is employed during the
15period described under par. (b) or 70 percent of the employee's monthly wages during
16that period.
AB837,3,1817
3. The maximum amount that a claimant may claim under this subsection in
18any taxable year is $10,000.
AB837,4,219
4. 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 amounts under par. (b). A partnership,
22limited liability company, or tax-option corporation shall compute the amount of
23credit that each of its partners, members, or shareholders may claim and shall
24provide that information to each of them. Partners, members of limited liability
1companies, and shareholders of tax-option corporations may claim the credit in
2proportion to their ownership interests.
AB837,4,43
(d)
Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
4s. 71.28 (4), applies to the credit under this subsection.
AB837, s. 3
5Section
3. 71.10 (4) (cn) of the statutes is created to read:
AB837,4,66
71.10
(4) (cn)
Youth summer employment credit under s. 71.07 (5c).
AB837, s. 4
7Section
4. 71.21 (4) of the statutes is amended to read:
AB837,4,108
71.21
(4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
9(2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), (5b),
(5c), (5e), (5f), (5g), and
10(5h) and passed through to partners shall be added to the partnership's income.
AB837, s. 5
11Section
5. 71.26 (2) (a) of the statutes is amended to read:
AB837,5,412
71.26
(2) (a)
Corporations in general. The "net income" of a corporation means
13the gross income as computed under the Internal Revenue Code as modified under
14sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
15computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c)
167., the amount of the credit under s. 71.28 (3) that the taxpayer added to income
17under this paragraph at the time that the taxpayer first claimed the credit plus the
18amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm),
19(1ds), (1dx), (3g), (3n), (3t), (3w), (5b),
(5c), (5e), (5f), (5g), and (5h) and not passed
20through by a partnership, limited liability company, or tax-option corporation that
21has added that amount to the partnership's, limited liability company's, or
22tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus the amount
23of losses from the sale or other disposition of assets the gain from which would be
24wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise
25disposed of at a gain and minus deductions, as computed under the Internal Revenue
1Code as modified under sub. (3), plus or minus, as appropriate, an amount equal to
2the difference between the federal basis and Wisconsin basis of any asset sold,
3exchanged, abandoned, or otherwise disposed of in a taxable transaction during the
4taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).
AB837, s. 6
5Section
6. 71.28 (5c) of the statutes is created to read:
AB837,5,76
71.28
(5c) Youth summer employment credit. (a)
Definitions. In this
7subsection:
AB837,5,88
1. "Claimant" means a person who files a claim under this subsection.
AB837,5,99
2. "Full time" means at least 35 hours a week.
AB837,5,1010
3. "Part time" means less than 35 hours a week.
AB837,5,1411
(b)
Filing claims. Subject to the limitations provided in this subsection, a
12claimant may claim as a credit against the taxes imposed under s. 71.23, up to the
13amount of those taxes, an amount that is equal to the amount of the wages that the
14claimant paid in the taxable year to an employee, if all of the following apply:
AB837,5,1615
1. The claimant paid the wages for work performed during the period beginning
16on July 1 and ending on the first Monday in September of the taxable year.
AB837,5,1717
2. The employee is at least 15 years of age, but no more than 18 years of age.
AB837,5,2118
3. The employee is either a high school student or graduates from high school
19during the taxable year prior to the first Monday in September and provides proof
20to the claimant that he or she is enrolled in a university or college located in this state
21and intends to begin instruction at the university or college in that taxable year.
AB837,5,2322
4. The employee receives an hourly wage that is at least 20 percent more than
23the federal minimum hourly wage.
AB837,5,2524
5. The student's most recent cumulative high school grade point average is at
25least 3.0 or the equivalent.
AB837,6,5
1(c)
Limitations. 1. The maximum amount that a claimant may claim under this
2subsection in any taxable year for any single employee who works full time is an
3amount that is equal to the lesser of $600 for each month that the employee is
4employed during the period described under par. (b) or 70 percent of the employee's
5monthly wages during that period.
AB837,6,106
2. The maximum amount that a claimant may claim under this subsection in
7any taxable year for any single employee who works part time is an amount that is
8equal to the lesser of $300 for each month that the employee is employed during the
9period described under par. (b) or 70 percent of the employee's monthly wages during
10that period.
AB837,6,1211
3. The maximum amount that a claimant may claim under this subsection in
12any taxable year is $10,000.
AB837,6,2013
4. 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 are based on their payment of amounts under par. (b). A partnership,
16limited liability company, or tax-option corporation shall compute the amount of
17credit that each of its partners, members, or shareholders may claim and shall
18provide that information to each of them. Partners, members of limited liability
19companies, and shareholders of tax-option corporations may claim the credit in
20proportion to their ownership interests.
