AB732, s. 16 17Section 16. 71.28 (5) (ab) 3. of the statutes is amended to read:
AB732,9,2418 71.28 (5) (ab) 3. "Vehicle" means any vehicle or frame, including parts,
19accessories, and component technologies, in which or on which an engine is mounted
20for use in mobile or stationary applications. "Vehicle" includes any truck, tractor,
21motorcycle, snowmobile, all-terrain vehicle, boat, personal watercraft, generator,
22construction equipment, mechanical drive for a stationary engine, lawn and garden
23maintenance equipment, automobile, van, sports utility vehicle, motor home, bus, or
24aircraft.
AB732, s. 17 25Section 17. 71.28 (5) (ad) 1. of the statutes is amended to read:
AB732,10,8
171.28 (5) (ad) 1. Except as provided in subds. 2., 2m., and 3., for taxable year
21986 and subsequent years, any corporation may credit against taxes otherwise due
3under this chapter an amount equal to 5 percent of the amount paid or incurred by
4that corporation during the taxable year to construct and equip new facilities or
5expand existing facilities used in this state for qualified research, as defined in
6section 41 of the Internal Revenue Code. Eligible amounts include only amounts
7paid or incurred for tangible, depreciable property but do not include amounts paid
8or incurred for replacement property.
AB732, s. 18 9Section 18. 71.28 (5) (ad) 2. of the statutes is amended to read:
AB732,10,2110 71.28 (5) (ad) 2. For taxable years beginning after June 30, 2007, and before
11January 1, 2012,
any corporation may credit against taxes otherwise due under this
12chapter an amount equal to 10 percent of the amount paid or incurred by that
13corporation during the taxable year to construct and equip new facilities or expand
14existing facilities used in this state for qualified research, as defined in section 41 of
15the Internal Revenue Code, except that "qualified research expenses" includes only
16expenses paid or incurred by the claimant for research related to designing internal
17combustion engines for vehicles, including expenses related to designing vehicles
18that are powered by such engines and improving production processes for such
19engines and vehicles. Eligible amounts include only amounts paid or incurred for
20tangible, depreciable property but do not include amounts paid or incurred for
21replacement property.
AB732, s. 19 22Section 19. 71.28 (5) (ad) 2m. of the statutes is created to read:
AB732,11,923 71.28 (5) (ad) 2m. For taxable years beginning after December 31, 2011, any
24corporation may claim as a credit against taxes otherwise due under s. 71.23 an
25amount equal to 15 percent of the amount paid or incurred by that corporation during

1the taxable year to construct and equip new facilities or expand existing facilities
2used in this state for qualified research, as defined in section 41 of the Internal
3Revenue Code, except that "qualified research expenses" includes only expenses paid
4or incurred by the claimant for research directly or indirectly related to designing
5internal combustion engines for vehicles, including expenses related to designing
6vehicles that are powered by such engines and improving production processes for
7such engines and vehicles. Eligible amounts include only amounts paid or incurred
8for tangible, depreciable property but do not include amounts paid or incurred for
9replacement property.
AB732, s. 20 10Section 20. 71.28 (5) (c) of the statutes is created to read:
AB732,11,1611 71.28 (5) (c) Limitations. 1. The credits under par. (ad) 1., 2., and 3. may not
12be claimed by a partnership, except a publicly traded partnership treated as a
13corporation under s. 71.22 (1k), limited liability company, except a limited liability
14company treated as a corporation under s. 71.22 (1k), or tax-option corporation or
15by partners, including partners of a publicly traded partnership, members of a
16limited liability company, or shareholders of a tax-option corporation.
AB732,11,2517 2. Partnerships, limited liability companies, and tax-option corporations may
18not claim the credit under par. (ad) 2m., but the eligibility for, and the amount of, the
19credit are based on their payment of amounts under par. (ad) 2m. A partnership,
20limited liability company, or tax-option corporation shall compute the amount of
21credit that each of its partners, members, or shareholders may claim and shall
22provide that information to each of them. Partners, members of limited liability
23companies, and shareholders of tax-option corporations may claim the credit in
24proportion to their allocation of the deductions of the qualified research expenses
25used to determine the credit.
AB732, s. 21
1Section 21. 71.34 (1k) (g) of the statutes, as affected by 2011 Wisconsin Act 32,
2is amended to read:
AB732,12,73 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
4corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy),
5(3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (4) (ad) 2m., (5) (ad) 2m.,
6(5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5r), (5rm), and (8r) and passed through to
7shareholders.
AB732, s. 22 8Section 22. 71.365 (3) of the statutes is repealed.
AB732, s. 23 9Section 23. 71.45 (2) (a) 10. of the statutes, as affected by 2011 Wisconsin Act
1032
, is amended to read:
AB732,12,1811 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
12computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn),
13(3w), (4) (ad) 2m., (5) (ad) 2m., (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5r), (5rm), (8r),
14and (9s) and not passed through by a partnership, limited liability company, or
15tax-option corporation that has added that amount to the partnership's, limited
16liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k)
17(g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4) (ad) 2m., (4m),
18and (5) (ad) 2m.
AB732, s. 24 19Section 24. 71.47 (4) (ab) 2. of the statutes is repealed.
AB732, s. 25 20Section 25. 71.47 (4) (ab) 3. of the statutes is amended to read:
AB732,13,221 71.47 (4) (ab) 3. "Vehicle" means any vehicle or frame, including parts,
22accessories, and component technologies, in which or on which an engine is mounted
23for use in mobile or stationary applications. "Vehicle" includes any truck, tractor,
24motorcycle, snowmobile, all-terrain vehicle, boat, personal watercraft, generator,
25construction equipment, mechanical drive for a stationary engine, lawn and garden

1maintenance equipment, automobile, van, sports utility vehicle, motor home, bus, or
2aircraft.
AB732, s. 26 3Section 26. 71.47 (4) (ad) 1. of the statutes is amended to read:
AB732,13,184 71.47 (4) (ad) 1. Except as provided in subds. 2., 2m., and 3., any corporation
5may credit against taxes otherwise due under this chapter an amount equal to 5
6percent of the amount obtained by subtracting from the corporation's qualified
7research expenses, as defined in section 41 of the Internal Revenue Code, except that
8"qualified research expenses" includes only expenses incurred by the claimant,
9incurred for research conducted in this state for the taxable year, except that a
10taxpayer may elect the alternative computation under section 41 (c) (4) of the
11Internal Revenue Code and that election applies until the department permits its
12revocation, except as provided in par. (af), and except that "qualified research
13expenses" does not include compensation used in computing the credit under subs.
14(1dj) and (1dx), the corporation's base amount, as defined in section 41 (c) of the
15Internal Revenue Code, except that gross receipts used in calculating the base
16amount means gross receipts from sales attributable to Wisconsin under s. 71.25 (9)
17(b) 1. and 2., (df) 1. and 2., (dh) 1., 2., and 3., (dj), and (dk). Section 41 (h) of the
18Internal Revenue Code does not apply to the credit under this paragraph.
AB732, s. 27 19Section 27. 71.47 (4) (ad) 2. of the statutes is amended to read:
AB732,14,1220 71.47 (4) (ad) 2. For taxable years beginning after June 30, 2007, and before
21January 1, 2012,
any corporation may credit against taxes otherwise due under this
22chapter an amount equal to 10 percent of the amount obtained by subtracting from
23the corporation's qualified research expenses, as defined in section 41 of the Internal
24Revenue Code, except that "qualified research expenses" includes only expenses
25incurred by the claimant for research related to designing internal combustion

1engines for vehicles, including expenses related to designing vehicles that are
2powered by such engines and improving production processes for such engines and
3vehicles, incurred for research conducted in this state for the taxable year, except
4that a taxpayer may elect the alternative computation under section 41 (c) (4) of the
5Internal Revenue Code and that election applies until the department permits its
6revocation, except as provided in par. (af), and except that "qualified research
7expenses" does not include compensation used in computing the credit under subs.
8(1dj) and (1dx), the corporation's base amount, as defined in section 41 (c) of the
9Internal Revenue Code, except that gross receipts used in calculating the base
10amount means gross receipts from sales attributable to Wisconsin under s. 71.25 (9)
11(b) 1. and 2., (df) 1. and 2., (dh) 1., 2., and 3., (dj), and (dk). Section 41 (h) of the
12Internal Revenue Code does not apply to the credit under this paragraph.
AB732, s. 28 13Section 28. 71.47 (4) (ad) 2m. of the statutes is created to read:
AB732,15,314 71.47 (4) (ad) 2m. For taxable years beginning after December 31, 2011, any
15corporation may claim as a credit against taxes otherwise due under s. 71.43 an
16amount equal to 15 percent of the corporation's qualified research expenses, as
17defined in section 41 of the Internal Revenue Code, that the corporation paid during
18the taxable year, except that "qualified research expenses" includes only expenses
19paid by the claimant for research directly or indirectly related to designing internal
20combustion engines for vehicles, including expenses related to designing vehicles
21that are powered by such engines and improving production processes for such
22engines and vehicles, incurred for research conducted in this state for the taxable
23year, except that a taxpayer may elect the alternative computation under section 41
24(c) (4) of the Internal Revenue Code and that election applies until the department
25permits its revocation, except as provided in par. (af), and except that "qualified

1research expenses" does not include compensation used in computing the credit
2under subs. (1dj) and (1dx). Section 41 (h) of the Internal Revenue Code does not
3apply to the credit under this paragraph.
AB732, s. 29 4Section 29. 71.47 (4) (af) of the statutes is amended to read:
AB732,15,95 71.47 (4) (af) Computation. If in any taxable year a corporation claims a credit
6under par. (ad) 1., 2., 2m., or 3., or any combination of those credits, the corporation
7may use a different computation method to calculate each of the credits and may
8choose to change the computation method once for each credit without the
9department's approval.
AB732, s. 30 10Section 30. 71.47 (4) (i) of the statutes is renumbered 71.47 (4) (i) 1. and
11amended to read:
AB732,15,1812 71.47 (4) (i) Nonclaimants Limitations. 1. The credits under this subsection
13par. (ad) 1., 2., and 3. may not be claimed by a partnership, except a publicly traded
14partnership treated as a corporation under s. 71.22 (1k), limited liability company,
15except a limited liability company treated as a corporation under s. 71.22 (1k), or
16tax-option corporation or by partners, including partners of a publicly traded
17partnership, members of a limited liability company or shareholders of a tax-option
18corporation.
AB732, s. 31 19Section 31. 71.47 (4) (i) 2. of the statutes is created to read:
AB732,16,320 71.47 (4) (i) 2. Partnerships, limited liability companies, and tax-option
21corporations may not claim the credit under par. (ad) 2m., but the eligibility for, and
22the amount of, the credit are based on their payment of amounts under par. (ad) 2m.
23A partnership, limited liability company, or tax-option corporation shall compute
24the amount of credit that each of its partners, members, or shareholders may claim
25and shall provide that information to each of them. Partners, members of limited

1liability companies, and shareholders of tax-option corporations may claim the
2credit in proportion to their allocation of the deductions of the qualified research
3expenses used to determine the credit.
AB732, s. 32 4Section 32. 71.47 (4m) (c) of the statutes is amended to read:
AB732,16,65 71.47 (4m) (c) Limitations. Section 71.28 (4) (b) to (d) and (i) 1., as it applies
6to the credit under s. 71.28 (4), applies to the credit under this subsection.
AB732, s. 33 7Section 33. 71.47 (5) (ab) 2. of the statutes is repealed.
AB732, s. 34 8Section 34. 71.47 (5) (ab) 3. of the statutes is amended to read:
AB732,16,159 71.47 (5) (ab) 3. "Vehicle" means any vehicle or frame, including parts,
10accessories, and component technologies, in which or on which an engine is mounted
11for use in mobile or stationary applications. "Vehicle" includes any truck, tractor,
12motorcycle, snowmobile, all-terrain vehicle, boat, personal watercraft, generator,
13construction equipment, mechanical drive for a stationary engine, lawn and garden
14maintenance equipment, automobile, van, sports utility vehicle, motor home, bus, or
15aircraft.
AB732, s. 35 16Section 35. 71.47 (5) (ad) 1. of the statutes is amended to read:
AB732,16,2417 71.47 (5) (ad) 1. Except as provided in subds. 2., 2m., and 3., for taxable year
181986 and subsequent years, any corporation may credit against taxes otherwise due
19under this chapter an amount equal to 5 percent of the amount paid or incurred by
20that corporation during the taxable year to construct and equip new facilities or
21expand existing facilities used in this state for qualified research, as defined in
22section 41 of the Internal Revenue Code. Eligible amounts include only amounts
23paid or incurred for tangible, depreciable property but do not include amounts paid
24or incurred for replacement property.
AB732, s. 36 25Section 36. 71.47 (5) (ad) 2. of the statutes is amended to read:
AB732,17,12
171.47 (5) (ad) 2. For taxable years beginning after June 30, 2007, and before
2January 1, 2012,
any corporation may credit against taxes otherwise due under this
3chapter an amount equal to 10 percent of the amount paid or incurred by that
4corporation during the taxable year to construct and equip new facilities or expand
5existing facilities used in this state for qualified research, as defined in section 41 of
6the Internal Revenue Code, except that "qualified research expenses" includes only
7expenses paid or incurred by the claimant for research related to designing internal
8combustion engines for vehicles, including expenses related to designing vehicles
9that are powered by such engines and improving production processes for such
10engines and vehicles. Eligible amounts include only amounts paid or incurred for
11tangible, depreciable property but do not include amounts paid or incurred for
12replacement property.
AB732, s. 37 13Section 37. 71.47 (5) (ad) 2m. of the statutes is created to read:
AB732,17,2514 71.47 (5) (ad) 2m. For taxable years beginning after December 31, 2011, any
15corporation may claim as a credit against taxes otherwise due under s. 71.43 an
16amount equal to 15 percent of the amount paid or incurred by that corporation during
17the taxable year to construct and equip new facilities or expand existing facilities
18used in this state for qualified research, as defined in section 41 of the Internal
19Revenue Code, except that "qualified research expenses" includes only expenses paid
20or incurred by the claimant for research directly or indirectly related to designing
21internal combustion engines for vehicles, including expenses related to designing
22vehicles that are powered by such engines and improving production processes for
23such engines and vehicles. Eligible amounts include only amounts paid or incurred
24for tangible, depreciable property but do not include amounts paid or incurred for
25replacement property.
AB732, s. 38
1Section 38. 71.47 (5) (c) of the statutes is created to read:
AB732,18,72 71.47 (5) (c) Limitations. 1. The credits under par. (ad) 1., 2., and 3. may not
3be claimed by a partnership, except a publicly traded partnership treated as a
4corporation under s. 71.22 (1k), limited liability company, except a limited liability
5company treated as a corporation under s. 71.22 (1k), or tax-option corporation or
6by partners, including partners of a publicly traded partnership, members of a
7limited liability company, or shareholders of a tax-option corporation.
AB732,18,168 2. Partnerships, limited liability companies, and tax-option corporations may
9not claim the credit under par. (ad) 2m., but the eligibility for, and the amount of, the
10credit are based on their payment of amounts under par. (ad) 2m. A partnership,
11limited liability company, or tax-option corporation shall compute the amount of
12credit that each of its partners, members, or shareholders may claim and shall
13provide that information to each of them. Partners, members of limited liability
14companies, and shareholders of tax-option corporations may claim the credit in
15proportion to their allocation of the deductions of the qualified research expenses
16used to determine the credit.
AB732, s. 39 17Section 39. 77.92 (4) of the statutes, as affected by 2011 Wisconsin Act 32, is
18amended to read:
AB732,19,919 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), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r),
3(3rm), (3rn), (3s), (3t), (3w), (5a), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), (5r), (5rm),
4and (8r); and plus or minus, as appropriate, transitional adjustments, depreciation
5differences, and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but
6excluding income, gain, loss, and deductions from farming. "Net business income,"
7with respect to a natural person, estate, or trust, means profit from a trade or
8business for federal income tax purposes and includes net income derived as an
9employee as defined in section 3121 (d) (3) of the Internal Revenue Code.
AB732, s. 40 10Section 40. Effective date.
AB732,19,1111 (1) This act takes effect on January 1, 2012.
AB732,19,1212 (End)
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