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  Date of enactment: April 3, 2018
2017 Assembly Bill 259   Date of publication*: April 4, 2018
* Section 991.11, Wisconsin Statutes: Effective date of acts. “Every act and every portion of an act enacted by the legislature over the governor's partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication."
2017 WISCONSIN ACT 231
An Act to amend 71.01 (6) (k) 1., 71.01 (6) (k) 3., 71.05 (6) (b) 28. (intro.), 71.05 (6) (b) 49. a., 71.05 (6) (b) 49. b., 71.05 (10) (i) 1., 71.05 (23) (b) 2., 71.08 (1) (d), 71.10 (1m) (c), 71.22 (4) (k) 1., 71.22 (4) (k) 3., 71.22 (4m) (k) 1., 71.22 (4m) (k) 3., 71.26 (2) (b) 11. a., 71.26 (2) (b) 11. d., 71.26 (3) (j), 71.30 (2m) (c), 71.34 (1g) (k) 1., 71.34 (1g) (k) 3., 71.42 (2) (k) 1., 71.42 (2) (k) 3., 71.80 (1m) (c), 71.98 (3), 73.16 (3) (b), 77.54 (9m) and 224.50 (2) (a); and to create 71.01 (6) (L), 71.05 (6) (b) 49. k., 71.22 (4) (L), 71.22 (4m) (L), 71.26 (2) (b) 12., 71.34 (1g) (L), 71.42 (2) (L), 71.98 (9), 73.16 (3) (c) and 77.54 (9a) (fc) of the statutes; relating to: the evidentiary standard for proving a transaction has economic substance; updating Internal Revenue Code references for state tax purposes; clarifying the duties of the College Savings Program Board; a sales and use tax exemption for title holding entities for certain tax-exempt charitable organizations; computing depletion for income and franchise tax purposes; and reliance by a taxpayer on past audits by the Department of Revenue.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
231,1 Section 1. 71.01 (6) (k) 1. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.01 (6) (k) 1. For taxable years beginning after December 31, 2016, and before January 1, 2018, for individuals and fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2016, except as provided in subds. 2. and 3. and s. 71.98 and subject to subd. 4.
231,2 Section 2. 71.01 (6) (k) 3. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.01 (6) (k) 3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2016, except that “Internal Revenue Code” includes sections 11024, 11025, and 13543 of P.L. 115-97.
231,3 Section 3. 71.01 (6) (L) of the statutes is created to read:
71.01 (6) (L) 1. For taxable years beginning after December 31, 2017, for individuals and fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2017, except as provided in subds. 2. and 3. and s. 71.98 and subject to subd. 4.
2. For purposes of this paragraph, “Internal Revenue Code" does not include the following provisions of federal public laws for taxable years beginning after December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L. 106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L. 109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L. 110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section 15351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections 312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251, 1501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L. 111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L. 111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and 411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to 171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011, 11012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531, 13601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214, 14215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.
3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2017.
4. For purposes of this paragraph, the provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, as defined in this paragraph, apply for Wisconsin purposes at the same time as for federal purposes.
231,4 Section 4. 71.05 (6) (b) 28. (intro.) of the statutes, as affected by 2017 Wisconsin Act 59, is amended to read:
71.05 (6) (b) 28. (intro.) An amount paid by a claimant for tuition expenses and mandatory student fees for a student who is the claimant or who is the claimant's child and the claimant's dependent who is claimed under section 151 (c), as defined under section 152 of the Internal Revenue Code, to attend any university, college, technical college or a school approved under s. 440.52, that is located in Wisconsin or to attend a public vocational school or public institution of higher education in Minnesota under the Minnesota-Wisconsin reciprocity agreement under s. 39.47, calculated as follows:
231,5 Section 5. 71.05 (6) (b) 49. a. of the statutes is amended to read:
71.05 (6) (b) 49. a. Subject to the definitions provided in subd. 49. b. to g. and the limitations specified in subd. 49. h. to j. for taxable years beginning after December 31, 2013, and subject to the limitation in subd. 49. k. for taxable years beginning after December 31, 2017, tuition expenses that are paid by a claimant for tuition for a pupil to attend an eligible institution.
231,6 Section 6. 71.05 (6) (b) 49. b. of the statutes is amended to read:
71.05 (6) (b) 49. b. In this subdivision, “claimant" means an individual who claims a pupil as a dependent under section 151 (c), as defined under section 152 of the Internal Revenue Code, on his or her tax return.
231,7 Section 7. 71.05 (6) (b) 49. k. of the statutes is created to read:
71.05 (6) (b) 49. k. For taxable years beginning after December 31, 2017, no modification may be claimed under this subdivision for an amount paid for tuition expenses, as described under this subdivision, if the source of the payment is an amount withdrawn from a college savings account, as described in s. 224.50.
231,8 Section 8. 71.05 (10) (i) 1. of the statutes is amended to read:
71.05 (10) (i) 1. Subject to the conditions in this paragraph, an individual may subtract up to $10,000 from federal adjusted gross income if he or she, or his or her dependent who is claimed under section 151 (c), as defined under section 152 of the Internal Revenue Code, while living, donates one or more of his or her human organs to another human being for human organ transplantation, as defined in s. 146.345 (1), except that in this paragraph, “human organ" means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. A subtract modification that is claimed under this paragraph may be claimed in the taxable year in which the human organ transplantation occurs.
231,9 Section 9. 71.05 (23) (b) 2. of the statutes is amended to read:
71.05 (23) (b) 2. An exemption of $700 for each individual for whom the taxpayer is entitled to an exemption for the taxable year under section 151 (c) dependent, as defined under section 152 of the Internal Revenue Code, of the taxpayer.
231,10 Section 10. 71.08 (1) (d) of the statutes is amended to read:
71.08 (1) (d) Subtract from the amount under par. (c) the appropriate amount under section 55 (d) (1), (3), and (4) of the federal Internal Revenue Code in effect for the taxable year; except that surviving spouses shall be treated as single individuals; except that the amount under par. (c), not the federal alternative minimum taxable income, shall be used in calculating the phase-out and except that for nonresidents and part-year residents the amount under section 55 (d) (1), (3), and (4) of the federal Internal Revenue Code in effect for the taxable year shall be prorated on the basis of the ratio of Wisconsin adjusted gross income to federal adjusted gross income.
231,11 Section 11. 71.10 (1m) (c) of the statutes is amended to read:
71.10 (1m) (c) With respect to transactions a transaction between members of a controlled group, as defined in section 267 (f) (1) of the Internal Revenue Code, such transactions the transaction shall be presumed to lack economic substance, and the taxpayer shall bear the burden of establishing by clear and convincing satisfactory evidence that a the transaction or a the series of transactions between the taxpayer and one or more members of the controlled group has economic substance.
231,12 Section 12. 71.22 (4) (k) 1. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.22 (4) (k) 1. For taxable years beginning after December 31, 2016, and before January 1, 2018, “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2016, except as provided in subds. 2. and 3. and subject to subd. 4., and except as provided in sub. (4m) and ss. 71.26 (2) (b) and (3), 71.34 (1g), 71.42 (2), and 71.98.
231,13 Section 13. 71.22 (4) (k) 3. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.22 (4) (k) 3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2016, except that “Internal Revenue Code” includes sections 11024, 11025, and 13543 of P.L. 115-97.
231,14 Section 14. 71.22 (4) (L) of the statutes is created to read:
71.22 (4) (L) 1. For taxable years beginning after December 31, 2017, “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2017, except as provided in subds. 2. and 3. and subject to subd. 4., and except as provided in sub. (4m) and ss. 71.26 (2) (b) and (3), 71.34 (1g), 71.42 (2), and 71.98.
2. For purposes of this paragraph, “Internal Revenue Code" does not include the following provisions of federal public laws for taxable years beginning after December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L. 106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L. 109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L. 110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section 15351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections 312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251, 1501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L. 111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L. 111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and 411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to 171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011, 11012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531, 13601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214, 14215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.
3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2017.
4. For purposes of this paragraph, the provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, as defined in this paragraph, apply for Wisconsin purposes at the same time as for federal purposes.
231,15 Section 15. 71.22 (4m) (k) 1. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.22 (4m) (k) 1. For taxable years beginning after December 31, 2016, and before January 1, 2018, “Internal Revenue Code", for corporations that are subject to a tax on unrelated business income under s. 71.26 (1) (a), means the federal Internal Revenue Code as amended to December 31, 2016, except as provided in subds. 2. and 3. and s. 71.98 and subject to subd. 4.
231,16 Section 16. 71.22 (4m) (k) 3. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.22 (4m) (k) 3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2016, except that “Internal Revenue Code” includes sections 11024, 11025, and 13543 of P.L. 115-97.
231,17 Section 17. 71.22 (4m) (L) of the statutes is created to read:
71.22 (4m) (L) 1. For taxable years beginning after December 31, 2017, “Internal Revenue Code", for corporations that are subject to a tax on unrelated business income under s. 71.26 (1) (a), means the federal Internal Revenue Code as amended to December 31, 2017, except as provided in subds. 2. and 3. and s. 71.98 and subject to subd. 4.
2. For purposes of this paragraph, “Internal Revenue Code" does not include the following provisions of federal public laws for taxable years beginning after December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L. 106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L. 109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L. 110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section 15351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections 312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251, 1501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L. 111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L. 111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and 411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to 171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011, 11012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531, 13601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214, 14215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.
3. For purposes of this paragraph, “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2017.
4. For purposes of this paragraph, the provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, as defined in this paragraph, apply for Wisconsin purposes at the same time as for federal purposes.
231,18 Section 18. 71.26 (2) (b) 11. a. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.26 (2) (b) 11. a. For taxable years beginning after December 31, 2016, and before January 1, 2018, for a corporation, conduit, or common law trust which qualifies as a regulated investment company, real estate mortgage investment conduit, real estate investment trust, or financial asset securitization investment trust under the Internal Revenue Code, “net income" means the federal regulated investment company taxable income, federal real estate mortgage investment conduit taxable income, federal real estate investment trust or financial asset securitization investment trust taxable income of the corporation, conduit, or trust as determined under the Internal Revenue Code.
231,19 Section 19. 71.26 (2) (b) 11. d. of the statutes, as created by 2017 Wisconsin Act 59, is amended to read:
71.26 (2) (b) 11. d. For purposes of subd. 11. a., “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2016, except that “Internal Revenue Code” includes sections 11024, 11025, and 13543 of P.L. 115-97.
231,20 Section 20. 71.26 (2) (b) 12. of the statutes is created to read:
71.26 (2) (b) 12. a. For taxable years beginning after December 31, 2017, for a corporation, conduit, or common law trust which qualifies as a regulated investment company, real estate mortgage investment conduit, real estate investment trust, or financial asset securitization investment trust under the Internal Revenue Code, “net income" means the federal regulated investment company taxable income, federal real estate mortgage investment conduit taxable income, federal real estate investment trust or financial asset securitization investment trust taxable income of the corporation, conduit, or trust as determined under the Internal Revenue Code.
b. For purposes of subd. 12. a., “Internal Revenue Code" means the federal Internal Revenue Code as amended to December 31, 2017, except as provided in subd. 12. c. and d. and s. 71.98 and subject to subd. 12. e.
c. For purposes of subd. 12. a., “Internal Revenue Code" does not include the following provisions of federal public laws for taxable years beginning after December 31, 2017: section 13113 of P.L. 103-66; sections 1, 3, 4, and 5 of P.L. 106-519; sections 101, 102, and 422 of P.L. 108-357; sections 1310 and 1351 of P.L. 109-58; section 11146 of P.L. 109-59; section 403 (q) of P.L. 109-135; section 513 of P.L. 109-222; sections 104 and 307 of P.L. 109-432; sections 8233 and 8235 of P.L. 110-28; section 11 (e) and (g) of P.L. 110-172; section 301 of P.L. 110-245; section 15351 of P.L. 110-246; section 302 of division A, section 401 of division B, and sections 312, 322, 502 (c), 707, and 801 of division C of P.L. 110-343; sections 1232, 1241, 1251, 1501, and 1502 of division B of P.L. 111-5; sections 211, 212, 213, 214, and 216 of P.L. 111-226; sections 2011 and 2122 of P.L. 111-240; sections 753, 754, and 760 of P.L. 111-312; section 1106 of P.L. 112-95; sections 104, 318, 322, 323, 324, 326, 327, and 411 of P.L. 112-240; P.L. 114-7; section 1101 of P.L. 114-74; section 305 of division P of P.L. 114-113; sections 123, 125 to 128, 143, 144, 151 to 153, 165 to 167, 169 to 171, 189, 191, 307, 326, and 411 of division Q of P.L. 114-113; and sections 11011, 11012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531, 13601, 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214, 14215, 14221, 14222, 14301, 14302, 14304, and 14401 of P.L. 115-97.
d. For purposes of subd. 12. a., “Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2017.
e. For purposes of subd. 12. a., the provisions of federal public laws that directly or indirectly affect the Internal Revenue Code, as defined in this subdivision, apply for Wisconsin purposes at the same time as for federal purposes.
231,21 Section 21. 71.26 (3) (j) of the statutes is amended to read:
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