LRB-4167/1
JK&MPG:cjs:rs
2013 - 2014 LEGISLATURE
March 26, 2014 - Introduced by Senator Farrow, cosponsored by Representative
Tauchen. Referred to Committee on Government Operations, Public Works,
and Telecommunications.
SB696,1,10
1An Act to renumber and amend 71.07 (5b) (b) 1., 71.28 (5b) (b) 1., 71.47 (5b)
2(b) 1. and 76.638 (2);
to amend 71.07 (5b) (b) 2., 71.07 (5d) (b) 2., 71.28 (5b) (b)
32., 71.47 (5b) (b) 2., 238.15 (1) (f) 1. b., 238.15 (1) (f) 1. c., 238.15 (1) (f) 2., 238.15
4(1) (g), 238.15 (2) and 238.15 (3) (e); and
to create 71.07 (5b) (b) 1. b., 71.07 (5d)
5(b) 3., 71.28 (5b) (b) 1. b., 71.28 (5bm), 71.30 (3) (bp), 71.47 (5b) (b) 1. b., 71.47
6(5bm), 71.49 (1) (bp), 76.638 (2) (b), 76.639 and 238.155 of the statutes;
relating
7to: increasing the claim amounts and altering various eligibility criteria under
8the angel and early stage seed investment credits, authorizing the transfer of
9angel investment tax credits, and creating a tax credit for purchases made from
10qualified new business ventures.
Analysis by the Legislative Reference Bureau
This bill makes a number of changes to the early stage seed investment tax
credit and the angel investment tax credit program, including the following:
1. Under current law, a taxpayer may claim an early stage seed investment tax
credit equal to 25 percent of the taxpayer's investment paid to a fund manager that
the fund manager invests in a qualified new business venture, as certified by the
Wisconsin Economic Development Corporation (WEDC). Also, under current law, a
taxpayer may claim an angel investment tax credit equal to 25 percent of the
taxpayer's bona fide angel investment in a qualified new business venture. Under
the bill, with regard to the first $1,000,000 invested by the taxpayer, a taxpayer may
claim an early stage seed investment credit or an angel investment credit equal to
40 percent of the taxpayer's investment and, with regard to any amount invested
after that first $1,000,000, the taxpayer may claim a credit equal to 25 percent of the
taxpayer's investment.
2. Under current law, WEDC may certify a business as a qualified new business
venture if, among other eligibility criteria, the business is not primarily engaged in
real estate development, insurance, banking, lending, lobbying, political consulting,
professional services provided by attorneys, accountants, business consultants,
physicians, or health care consultants, wholesale or retail trade, leisure, hospitality,
transportation, or, with one exception, construction. Under the bill a business is
eligible for certification as a qualified new business venture if, in addition to the
other eligibility criteria established under current law, the business is not primarily
engaged in lobbying or political consulting.
3. Under current law, a person awarded an early stage seed investment tax
credit may sell or otherwise transfer the credit to another Wisconsin taxpayer, but
a person awarded the angel investment tax credit may not transfer that credit to
another person. Under the bill, a person awarded the angel investment tax credit
may sell or otherwise transfer the credit to another Wisconsin taxpayer.
4. Under current law, in determining whether to certify an investment fund
manager for purposes of the early stage seed investment tax credit, WEDC is
required to consider, among other factors, the expected level of investment in the
investment fund to be managed by the investment fund manager. The bill prohibits
WEDC from considering that factor.
The bill also creates a tax credit equal to 25 percent of the sales price of goods
and services that the taxpayer purchases from a qualified new business venture, as
certified by WEDC. The maximum amount that a taxpayer may claim as a credit for
such purchases in a taxable year is $125,000. Only corporations and insurers may
claim the credit. If the amount of the credit exceeds the taxpayer's tax liability, the
taxpayer does not receive a refund, but, instead, may claim the amount of any unused
credit in 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:
SB696,1
1Section
1. 71.07 (5b) (b) 1. of the statutes is renumbered 71.07 (5b) (b) 1. a. and
2amended to read:
SB696,3,7
171.07
(5b) (b) 1. a. For taxable years beginning after December 31, 2004,
and
2before January 1, 2014, subject to the limitations provided under this subsection and
3s. 238.15 or s. 560.205, 2009 stats., and except as provided in subd. 2., a claimant may
4claim as a credit against the tax imposed under ss. 71.02 and 71.08, up to the amount
5of those taxes, 25 percent of the claimant's investment paid to a fund manager that
6the fund manager invests in a business certified under s. 238.15 (1) or s. 560.205 (1),
72009 stats.
SB696,2
8Section
2. 71.07 (5b) (b) 1. b. of the statutes is created to read:
SB696,3,179
71.07
(5b) (b) 1. b. For taxable years beginning after December 31, 2013,
10subject to the limitations provided under this subsection and s. 238.15, and except
11as provided in subd. 2., a claimant may claim as a credit against the tax imposed
12under ss. 71.02 and 71.08, up to the amount of those taxes, with regard to the first
13$1,000,000 invested by the claimant, 40 percent of the claimant's investment paid to
14a fund manager that the fund manager invests in a business certified under s. 238.15
15(1) and, with regard to any amount invested by the claimant in excess of that first
16$1,000,000, 25 percent of the claimant's investment paid to a fund manager that the
17fund manager invests in a business certified under s. 238.15 (1).
SB696,3
18Section
3. 71.07 (5b) (b) 2. of the statutes is amended to read:
SB696,4,219
71.07
(5b) (b) 2. In the case of a partnership, limited liability company, or
20tax-option corporation, the computation of the 25
and 40 percent
limitation 21limitations under subd. 1. shall be determined at the entity level rather than the
22claimant level and may be allocated among the claimants who make investments in
23the manner set forth in the entity's organizational documents. The entity shall
24provide to the department of revenue and to the department of commerce or the
25Wisconsin Economic Development Corporation the names and tax identification
1numbers of the claimants, the amounts of the credits allocated to the claimants, and
2the computation of the allocations.
SB696,4
3Section
4. 71.07 (5d) (b) 2. of the statutes is amended to read:
SB696,4,84
71.07
(5d) (b) 2. For taxable years beginning after December 31, 2007,
and
5before January 1, 2014, for the taxable year certified by the department of commerce
6or the Wisconsin Economic Development Corporation, an amount equal to 25 percent
7of the claimant's bona fide angel investment made directly in a qualified new
8business venture.
SB696,5
9Section
5. 71.07 (5d) (b) 3. of the statutes is created to read:
SB696,4,1610
71.07
(5d) (b) 3. For taxable years beginning after December 31, 2013, for the
11taxable year certified by the Wisconsin Economic Development Corporation, with
12regard to the first $1,000,000 invested by the claimant, an amount equal to 40
13percent of the claimant's bona fide angel investment made directly in a qualified new
14business venture and, with regard to any amount invested by the claimant in excess
15of that first $1,000,000, an amount equal to 25 percent of the claimant's bona fide
16angel investment made directly in a qualified new business venture.
SB696,6
17Section
6. 71.28 (5b) (b) 1. of the statutes is renumbered 71.28 (5b) (b) 1. a. and
18amended to read:
SB696,4,2519
71.28
(5b) (b) 1. a. For taxable years beginning after December 31, 2004,
and
20before January 1, 2014, subject to the limitations provided under this subsection and
21s. 238.15 or s. 560.205, 2009 stats., and except as provided in subd. 2., a claimant may
22claim as a credit against the tax imposed under s. 71.23, up to the amount of those
23taxes, 25 percent of the claimant's investment paid to a fund manager that the fund
24manager invests in a business certified under s. 238.15 (1) or s. 560.205 (1), 2009
25stats.
SB696,7
1Section
7. 71.28 (5b) (b) 1. b. of the statutes is created to read:
SB696,5,102
71.28
(5b) (b) 1. b. For taxable years beginning after December 31, 2013,
3subject to the limitations provided under this subsection and s. 238.15, and except
4as provided in subd. 2., a claimant may claim as a credit against the tax imposed
5under s. 71.23, up to the amount of those taxes, with regard to the first $1,000,000
6invested by the claimant, 40 percent of the claimant's investment paid to a fund
7manager that the fund manager invests in a business certified under s. 238.15 (1)
8and, with regard to any amount invested by the claimant in excess of that first
9$1,000,000, 25 percent of the claimant's investment paid to a fund manager that the
10fund manager invests in a business certified under s. 238.15 (1).
SB696,8
11Section
8. 71.28 (5b) (b) 2. of the statutes is amended to read:
SB696,5,2012
71.28
(5b) (b) 2. In the case of a partnership, limited liability company, or
13tax-option corporation, the computation of the 25
and 40 percent
limitation 14limitations under subd. 1. shall be determined at the entity level rather than the
15claimant level and may be allocated among the claimants who make investments in
16the manner set forth in the entity's organizational documents. The entity shall
17provide to the department of revenue and to the department of commerce or the
18Wisconsin Economic Development Corporation the names and tax identification
19numbers of the claimants, the amounts of the credits allocated to the claimants, and
20the computation of the allocations.
SB696,9
21Section
9. 71.28 (5bm) of the statutes is created to read:
SB696,5,2222
71.28
(5bm) Qualified purchases credit. (a)
Definitions. In this subsection:
SB696,5,2323
1. "Claimant" means a person who files a claim under this subsection.
SB696,5,2524
2. "Qualified new business venture" means a business that is certified under
25s. 238.15 (1).
SB696,6,1
13. "Sales price" has the meaning given in s. 77.51 (15b).
SB696,6,22
4. "Tangible personal property" has the meaning given in s. 77.51 (20).
SB696,6,83
(b)
Filing claims. For taxable years beginning after December 31, 2013, and
4subject to the limitations provided in this subsection, a claimant may claim as a
5credit against the tax imposed under s. 71.23, up to the amount of those taxes, an
6amount, as certified under s. 238.155, equal to 25 percent of the sales price of the
7tangible personal property, goods under s. 77.52 (1) (d), and services that the
8claimant purchased from a qualified new business venture in the taxable year.
SB696,6,109
(c)
Limitations. 1. The maximum amount that a claimant may claim under this
10subsection for a taxable year is $125,000.
SB696,6,1211
2. No credit may be allowed under this subsection unless the claimant includes
12with the claimant's return a copy of the claimant's certification under s. 238.155.
SB696,6,1813
3. The credits under this subsection may not be claimed by a partnership,
14except a publicly traded partnership treated as a corporation under s. 71.22 (1k),
15limited liability company, except a limited liability company treated as a corporation
16under s. 71.22 (1k), or tax-option corporation or by partners, including partners of
17a publicly traded partnership, members of a limited liability company or
18shareholders of a tax-option corporation.
SB696,6,2019
(d)
Administration. Subsection (4) (e) to (h), as it applies to the credit under
20sub. (4), applies to the credit under this subsection.
SB696,10
21Section
10. 71.30 (3) (bp) of the statutes is created to read:
SB696,6,2222
71.30
(3) (bp) Qualified purchases credit under s. 71.28 (5bm).
SB696,11
23Section
11. 71.47 (5b) (b) 1. of the statutes is renumbered 71.47 (5b) (b) 1. a.
24and amended to read:
SB696,7,7
171.47
(5b) (b) 1. a. For taxable years beginning after December 31, 2004,
and
2before January 1, 2014, subject to the limitations provided under this subsection and
3s. 238.15 or s. 560.205, 2009 stats., and except as provided in subd. 2., a claimant may
4claim as a credit against the tax imposed under s. 71.43, up to the amount of those
5taxes, 25 percent of the claimant's investment paid to a fund manager that the fund
6manager invests in a business certified under s. 238.15 (1) or s. 560.205 (1), 2009
7stats.
SB696,12
8Section
12. 71.47 (5b) (b) 1. b. of the statutes is created to read:
SB696,7,179
71.47
(5b) (b) 1. b. For taxable years beginning after December 31, 2013,
10subject to the limitations provided under this subsection and s. 238.15, and except
11as provided in subd. 2., a claimant may claim as a credit against the tax imposed
12under s. 71.43, up to the amount of those taxes, with regard to the first $1,000,000
13invested by the claimant, 40 percent of the claimant's investment paid to a fund
14manager that the fund manager invests in a business certified under s. 238.15 (1)
15and, with regard to any amount invested by the claimant in excess of that first
16$1,000,000, 25 percent of the claimant's investment paid to a fund manager that the
17fund manager invests in a business certified under s. 238.15 (1).
SB696,13
18Section
13. 71.47 (5b) (b) 2. of the statutes is amended to read:
