2019 - 2020 LEGISLATURE
February 11, 2020 - Introduced by Representatives Summerfield, Petersen,
Dittrich, Plumer, Skowronski, Tusler and VanderMeer, cosponsored by
Senators Testin, Bernier and Olsen. Referred to Committee on Ways and
1An Act to amend
71.10 (4) (i); and
20.835 (2) (cb) and 71.07 (8m) of 2
the statutes; relating to: creating a refundable individual income tax credit for
3certain expenses incurred in the rehabilitation of an older home and making an
Analysis by the Legislative Reference Bureau
Subject to a number of limitations and conditions, this bill creates a refundable
individual income tax credit of 10 percent of the amount spent by the claimant on
qualified rehabilitation expenditures on a construction or reconstruction project on
eligible housing. Under the bill, eligible housing is defined as a single-family
residence that is the claimant's primary residence, provided that the initial
construction of the residence was completed before 1980 and the fair market value
of the residence is equal to or less than the median price of a single-family residence
located in the same county.
The maximum credit amount is $15,000 per claimant, which is 10 percent of up
to $150,000 spent on qualified rehabilitation expenditures. If a married couple files
a joint return, only one spouse may claim the credit. If the eligible housing is owned
by two or more individuals who are not married and do not have equal ownership,
the credit may be claimed based on the individual who incurs costs and the
ownership interest. For a project benefitting one owner, the credit may be claimed
by that individual based on qualified rehabilitation expenditures incurred
individually or, for projects benefitting two or more owners, the credit may be claimed
by each owner in proportion to the individual's ownership interest. A claimant may
not file a claim for the credit until the project is complete, which is evidenced by the
claimant providing information to the Department of Revenue demonstrating that
all permits required by the state or local governments have been issued and all
building inspections related to the project have been completed and approved by a
state or local building inspector. In addition, the bill requires that the basis of the
eligible housing be reduced by the amount of the credit received, and a claimant may
not claim qualified rehabilitation expenditures under this credit if the claimant used
those same expenditures to claim the supplement to the federal historic
rehabilitation credit or the state historic rehabilitation credit. Because the credit is
refundable, if the amount of the credit for which the individual is eligible exceeds his
or her tax liability, the difference will be refunded to the claimant.
For further information see the state and local 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:
20.835 (2) (cb) of the statutes is created to read:
(cb) Older housing rehabilitation credit.
A sum sufficient to pay the 3
claims approved under s. 71.07 (8m).
71.07 (8m) of the statutes is created to read:
71.07 (8m) Older housing rehabilitation credit.
In this 6
1. “Claimant" means an individual who files a claim under this subsection.
2. “Eligible housing” means a single-family residence that is the primary 9
residence of a claimant and which meets the conditions specified in par. (c) 5. and 6.
3. “Fair market value” means the estimated fair market value of a 11
single-family residence as shown on the property tax bill prepared for the prior year 12
under s. 74.09.
4. “Municipality" means a city, village, or town.
5. “Project” means a construction or reconstruction project on eligible housing.
6. “Qualified rehabilitation expenditure” means costs and expenses incurred 2
by a claimant to complete a project.
(b) Filing claims.
Subject to the limitations and conditions provided in this 4
subsection, a claimant may claim as a credit against the tax imposed under s. 71.02 5
an amount equal to 10 percent of the amount the claimant spent on qualified 6
rehabilitation expenditures on a single residence. If the allowable amount of the 7
claim exceeds the income taxes otherwise due on the claimant's income, the amount 8
of the claim not used as an offset against those taxes shall be certified by the 9
department of revenue to the department of administration for payment to the 10
claimant by check, share draft, or other draft drawn from the appropriation account 11
under s. 20.835 (2) (cb).
(c) Limitations and conditions.
1. Except as provided in subd. 8., the maximum 13
credit amount that a claimant may claim under this subsection is $15,000.
2. No credit may be claimed under this subsection by a part-year resident or 15
a nonresident of this state.
3. No credit may be allowed under this subsection unless it is claimed within 17
the period specified in s. 71.75 (2).
4. No credit may be allowed under this subsection for a taxable year covering 19
a period of less than 12 months, except for a taxable year closed by reason of the death 20
of the claimant.
5. No credit may be claimed under this subsection unless the initial 22
construction of the residence to which the claim relates was completed before 1980.
6. No credit may be claimed under this subsection unless the fair market value 24
of the residence to which the claim relates is equal to or less than the median price 25
of a single-family residence located in the same county, based on the most recent year
for which such data is available. For purposes of this subdivision, the median price 2
of a single-family residence in the applicable county shall be determined by the 3
7. If a married couple files a joint return only one spouse may claim the credit 5
under this subsection.
8. If a married couple files separate returns, the maximum amount that each 7
spouse may claim under this subsection is $7,500.
9. A claimant may not file a claim under this subsection until the project to 9
which the claim relates is complete. For purposes of this subsection, a project is 10
complete when all of the following conditions are satisfied, and proof of satisfaction 11
is filed with the department, along with the claimant's income tax return, on a form 12
prepared by the department:
a. All building and other permits required by the state and the municipality 14
in which the eligible housing is located, which relate to the project, have been issued.
b. All building inspections related to the project have been completed and 16
approved by the municipal or state building inspector.
10. The Wisconsin adjusted basis of the eligible housing shall be reduced by the 18
amount of any credit received under this subsection.
11. No credit may be claimed under this subsection for any qualified 20
rehabilitation expenditure that is also used as the basis to claim the credit under s. 21
71.07 (9m) or (9r).
12. If the eligible housing is owned by 2 or more individuals who hold legal title 23
or equitable title as a land contract vendee and are not joint tenants, tenants in 24
common, or spouses owning marital property, the credit under this subsection may 25
be claimed as follows:
a. For projects benefitting one owner, an individual may claim the credit based 2
on qualified rehabilitation expenditures incurred individually.
b. For projects benefitting 2 or more owners, an individual may claim the credit 4
based on qualified rehabilitation expenditures incurred by the benefitting owners in 5
proportion to the individual's ownership interest.
. Subsection (9e) (d), to the extent that it applies to the credit 7
under that subsection, applies to the credit under this subsection.
(i) The total of claim of right credit under s. 71.07 (1), farmland 11
preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and 12
beyond under s. 71.613, homestead credit under subch. VIII, farmland tax relief 13
credit under s. 71.07 (3m), dairy manufacturing facility investment credit under s. 14
71.07 (3p), jobs tax credit under s. 71.07 (3q), meat processing facility investment 15
credit under s. 71.07 (3r), woody biomass harvesting and processing credit under s. 16
71.07 (3rm), food processing plant and food warehouse investment credit under s. 17
71.07 (3rn), business development credit under s. 71.07 (3y), research credit under 18
s. 71.07 (4k) (e) 2. a., film production services credit under s. 71.07 (5f), film 19
production company investment credit under s. 71.07 (5h), veterans and surviving 20
spouses property tax credit under s. 71.07 (6e), older housing rehabilitation credit
21under s. 71.07 (8m),
enterprise zone jobs credit under s. 71.07 (3w), electronics and 22
information technology manufacturing zone credit under s. 71.07 (3wm), beginning 23
farmer and farm asset owner tax credit under s. 71.07 (8r), earned income tax credit 24
under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld under 25
(1) This act first applies to taxable years beginning on January 1 of the year 3
in which this subsection takes effect, except that if this subsection takes effect after 4
July 31, this act first applies to taxable years beginning on January 1 of the year 5
following the year in which this subsection takes effect.