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:
SB696,8,219
71.47
(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.
SB696,14
3Section
14. 71.47 (5bm) of the statutes is created to read:
SB696,8,44
71.47
(5bm) Qualified purchases credit. (a)
Definitions. In this subsection:
SB696,8,55
1. "Claimant" means a person who files a claim under this subsection.
SB696,8,76
2. "Qualified new business venture" means a business that is certified under
7s. 238.15 (1).
SB696,8,88
3. "Sales price" has the meaning given in s. 77.51 (15b).
SB696,8,99
4. "Tangible personal property" has the meaning given in s. 77.51 (20).
SB696,8,1510
(b)
Filing claims. For taxable years beginning after December 31, 2013, and
11subject to the limitations provided in this subsection, a claimant may claim as a
12credit against the tax imposed under s. 71.43, up to the amount of those taxes, an
13amount, as certified under s. 238.155, equal to 25 percent of the sales price of the
14tangible personal property, goods under s. 77.52 (1) (d), and services that the
15claimant purchased from a qualified new business venture in the taxable year.
SB696,8,1716
(c)
Limitations. 1. The maximum amount that a claimant may claim under this
17subsection for a taxable year is $125,000.
SB696,8,1918
2. No credit may be allowed under this subsection unless the claimant includes
19with the claimant's return a copy of the claimant's certification under s. 238.155.
SB696,8,2520
3. The credits under this subsection may not be claimed by a partnership,
21except a publicly traded partnership treated as a corporation under s. 71.22 (1k),
22limited liability company, except a limited liability company treated as a corporation
23under s. 71.22 (1k), or tax-option corporation or by partners, including partners of
24a publicly traded partnership, members of a limited liability company or
25shareholders of a tax-option corporation.
SB696,9,2
1(d)
Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
2s. 71.28 (4), applies to the credit under this subsection.
SB696,15
3Section
15. 71.49 (1) (bp) of the statutes is created to read:
SB696,9,44
71.49
(1) (bp) Qualified purchases credit under s. 71.47 (5bm).
SB696,16
5Section
16. 76.638 (2) of the statutes is renumbered 76.638 (2) (a) and
6amended to read:
SB696,9,127
76.638
(2) (a)
Filing claims. For taxable years beginning after December 31,
82008,
and before January 1, 2014, subject to the limitations provided under this
9subsection and s. 238.15 or s. 560.205, 2009 stats., an insurer may claim as a credit
10against the fees imposed under s. 76.60, 76.63, 76.65, 76.66, or 76.67, 25 percent of
11the insurer's investment paid to a fund manager that the fund manager invests in
12a business certified under s. 238.15 or s. 560.205 (1), 2009 stats.
SB696,17
13Section
17. 76.638 (2) (b) of the statutes is created to read:
SB696,9,2114
76.638
(2) (b) For taxable years beginning after December 31, 2013, subject to
15the limitations provided under this subsection and s. 238.15, an insurer may claim
16as a credit against the fees imposed under s. 76.60, 76.63, 76.65, 76.66, or 76.67, with
17regard to the first $1,000,000 invested by the insurer, 40 percent of the insurer's
18investment paid to a fund manager that the fund manager invests in a business
19certified under s. 238.15 and, with regard to any amount invested by the insurer in
20excess of that first $1,000,000, 25 percent of the insurer's investment paid to a fund
21manager that the fund manager invests in a business certified under s. 238.15.
SB696,18
22Section
18. 76.639 of the statutes is created to read:
SB696,9,23
2376.639 Qualified purchases credit. (1) Definitions. In this section:
SB696,9,2524
(a) "Qualified new business venture" means a business that is certified under
25s. 238.15 (1).
SB696,10,1
1(b) "Sales price" has the meaning given in s. 77.51 (15b).
SB696,10,22
(c) "Tangible personal property" has the meaning given in s. 77.51 (20).
SB696,10,8
3(2) Filing claims. For taxable years beginning after December 31, 2013, and
4subject to the limitations provided in this section, an insurer may claim as a credit
5against the fees imposed under s. 76.60, 76.63, 76.65, 76.66, or 76.67, an amount, as
6certified under s. 238.155, equal to 25 percent of the sales price of the tangible
7personal property, goods under s. 77.52 (1) (d), and services that the insurer
8purchased from a qualified new business venture in the taxable year.
SB696,10,10
9(3) Limitations. 1. The maximum amount that an insurer may claim under
10this section for a taxable year is $125,000.
SB696,10,1211
2. No credit may be allowed under this section unless the insurer includes with
12the insurer's return a copy of the insurer's certification under s. 238.155.
SB696,10,18
13(4) Carry-forward. If the credit under sub. (2) is not entirely offset against the
14fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due, the unused balance
15may be carried forward and credited against those fees for the following 15 years to
16the extent that it is not offset by those fees otherwise due in all the years between
17the year in which the expense was made and the year in which the carry-forward
18credit is claimed.
SB696,19
19Section
19. 238.15 (1) (f) 1. b. of the statutes is amended to read:
SB696,10,2320
238.15
(1) (f) 1. b. Processing or assembling products, including medical
21devices, pharmaceuticals, computer software, computer hardware, semiconductors,
22any other innovative technology products, or other products that are produced using
23manufacturing methods
that are enabled by applying proprietary technology.
SB696,20
24Section
20. 238.15 (1) (f) 1. c. of the statutes is amended to read:
SB696,11,2
1238.15
(1) (f) 1. c.
Services
Innovative services that are enabled by applying
2proprietary technology.
SB696,21
3Section
21. 238.15 (1) (f) 2. of the statutes is amended to read:
SB696,11,74
238.15
(1) (f) 2. It is undertaking pre-commercialization activity related to
5proprietary technology that includes conducting research, developing a new product
6or business process, or developing a service that is principally reliant on applying
7proprietary technology.
SB696,22
8Section
22. 238.15 (1) (g) of the statutes is amended to read:
SB696,11,149
238.15
(1) (g) It is not primarily engaged in
real estate development, insurance,
10banking, lending, lobbying
, or political consulting
, professional services provided by
11attorneys, accountants, business consultants, physicians, or health care
12consultants, wholesale or retail trade, leisure, hospitality, transportation, or
13construction, except construction of power production plants that derive energy from
14a renewable resource, as defined in s. 196.378 (1) (h).
SB696,23
15Section
23. 238.15 (2) of the statutes is amended to read:
SB696,12,516
238.15
(2) Early stage seed investment tax credits. The corporation shall
17implement a program to certify investment fund managers for purposes of ss. 71.07
18(5b), 71.28 (5b), 71.47 (5b), and 76.638. An investment fund manager desiring
19certification shall submit an application to the corporation. The investment fund
20manager shall specify in the application the investment amount that the manager
21wishes to raise and the corporation may certify the manager and determine the
22amount that qualifies for purposes of ss. 71.07 (5b), 71.28 (5b), 71.47 (5b), and 76.638.
23In determining whether to certify an investment fund manager, the corporation shall
24consider the investment fund manager's experience in managing venture capital
25funds, the past performance of investment funds managed by the applicant,
the
1expected level of investment in the investment fund to be managed by the applicant, 2and any other relevant factors.
The corporation may not consider the expected level
3of investment in the investment fund to be managed. The corporation may certify
4only investment fund managers that commit to consider placing investments in
5businesses certified under sub. (1).
SB696,24
6Section
24. 238.15 (3) (e) of the statutes is amended to read:
SB696,12,207
238.15
(3) (e)
Transfer. A person who is eligible to claim a credit under s. 71.07
8(5b), 71.28 (5b), 71.47 (5b), or 76.638 may sell or otherwise transfer the credit to
9another person who is subject to the taxes or fees imposed under s. 71.02, 71.23,
1071.47, or subch. III of ch. 76, if the person receives prior authorization from the
11investment fund manager and the manager then notifies the corporation and the
12department of revenue of the transfer and submits with the notification a copy of the
13transfer documents.
A person who is eligible to claim a credit under s. 71.07 (5d) may
14sell or otherwise transfer the credit to another person who is subject to the taxes or
15fees imposed under s. 71.02 or 71.08 if the person notifies the corporation and the
16department of revenue of the transfer and submits with the notification a copy of the
17transfer documents. No person may sell or otherwise transfer a credit as provided
18in this paragraph more than once in a 12-month period. The corporation may charge
19any person selling or otherwise transferring a credit under this paragraph a fee equal
20to 1 percent of the credit amount sold or transferred.
SB696,25
21Section
25. 238.155 of the statutes is created to read:
SB696,12,25
22238.155 Qualified purchases tax credit.
(1) Definition. In this section,
23"qualified purchase" means the purchase from a qualified new business venture, as
24defined in s. 238.15 (1), of tangible personal property, as defined in s. 77.51 (20), goods
25under s. 77.52 (1) (d), or services.
SB696,13,5
1(2) Certification program. (a) The corporation shall develop and implement
2an economic development program to certify qualified purchases for purposes of the
3tax credits under ss. 71.28 (5bm), 71.47 (5bm), and 76.639. A person desiring
4certification under this section shall submit an application to the corporation in each
5taxable year for which the person desires certification.
SB696,13,116
(b) Subject to the limitations under s. 71.28 (5bm), 71.47 (5bm), and 76.639, the
7corporation shall certify for each person submitting an application under par. (a) the
8amount that may be claimed as a tax credit under s. 71.28 (5bm), 71.47 (5bm), or
976.639, if the person submits evidence satisfactory to the corporation demonstrating
10the person's qualified purchases and that the person is otherwise eligible to claim the
11tax credit. The corporation shall provide the person with a copy of the certification.
SB696,26
12Section
26.
Initial applicability.
SB696,13,1513
(1) The treatment of sections 71.07 (5b) (b) 1. b. and (5d) (b) 3., 71.28 (5b) (b)
141. b., 71.47 (5b) (b) 1. b., and 76.638 (2) (b) of the statutes first applies to investments
15made in taxable years beginning on January 1, 2014.
