SB818: Bill Text

LRB-5688/1

JK:cdc

2019 - 2020 LEGISLATURE

2019 Senate BILL 818

February 12, 2020 - Introduced by Senators Marklein, Bernier and Testin, cosponsored by Representatives Tranel, Novak, Petryk, Pronschinske, Tauchen, Magnafici, Summerfield, Kitchens, Oldenburg, Plumer, Ballweg, Schraa, Krug, Skowronski and Tusler. Referred to Committee on Agriculture, Revenue and Financial Institutions.

SB818,1,7 An Act to amend 71.05 (6) (a) 15., 71.10 (4) (i), 71.21 (4) (a), 71.26 (2) (a) 4., 71.30 (3) (f), 71.34 (1k) (g), 71.45 (2) (a) 10. and 71.49 (1) (f); to repeal and recreate 71.05 (6) (a) 15., 71.10 (4) (i), 71.21 (4) (a), 71.26 (2) (a) 4., 71.30 (3) (f), 71.34 (1k) (g), 71.45 (2) (a) 10. and 71.49 (1) (f); and to create 20.835 (2) (bh), 71.07 (8s), 71.28 (8s) and 71.47 (8s) of the statutes; relating to: an income tax credit for the property taxes paid on agricultural buildings and improvements and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill creates an income and franchise tax credit equal to approximately 66 percent of the taxes levied on buildings and other improvements, not including residential property, that are located in this state and used exclusively for farming. The credit is limited to $7,500 for an individual, entity, or married couple filing jointly. In addition, in order to claim the credit, the claimant must have at least $35,000 in annual gross income from farming. The person will receive a refund if the amount of the credit exceeds the person's tax liability.

The bill also allows a taxpayer to claim the credit for 2020 online in the manner determined by DOR rather than file a tax return to claim the credit. Claiming the credit online for 2020 does not relieve the taxpayer of the taxpayer's obligation to otherwise file a return for that year.

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:

SB818,1 Section 1. 20.835 (2) (bh) of the statutes is created to read:

SB818,2,3 20.835 (2) (bh) Farm buildings credit. A sum sufficient to make the payments under ss. 71.07 (8s), 71.28 (8s), and 71.47 (8s).

SB818,2 Section 2. 71.05 (6) (a) 15. of the statutes is amended to read:

SB818,2,11 71.05 (6) (a) 15. Except as provided under s. 71.07 (3p) (c) 5., the amount of the credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5f), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), (8r), (8s), and (10) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).

SB818,3 Section 3 . 71.05 (6) (a) 15. of the statutes, as affected by 2019 Wisconsin Act 54 and 2019 Wisconsin Act .... (this act), is repealed and recreated to read:

SB818,2,19 71.05 (6) (a) 15. Except as provided under s. 71.07 (3p) (c) 5., the amount of the credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5i), (5j), (5k), (5r), (5rm), (6n), (8s), and (10) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).

SB818,4 Section 4. 71.07 (8s) of the statutes is created to read:

SB818,2,21 71.07 (8s) Farm buildings credit. (a) Definitions. In this subsection:

SB818,3,2 1. “Agricultural land” means land that is assessed as agricultural land under s. 70.32 (2) (a) 4.

SB818,3,3 2. “Claimant” means a person who files a claim under this subsection.

SB818,3,6 3. “Residential property” means property that is assessed as residential property under s. 70.32 (2) (a) 1. or a residence that is assessed as other under s. 70.32 (2) (a) 7.

SB818,3,8 4. “Used exclusively” means used to the exclusion of all other uses except for use not exceeding 5 percent of total use.

SB818,3,14 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2019, and before January 1, 2023, a claimant may claim as a credit against the taxes imposed under s. 71.02 an amount equal to the most recent assessed value of the claimant's buildings and improvements assessed as other under s. 70.32 (2) (a) 7., not including residential property, that are used exclusively for farming, multiplied by 0.01187.

SB818,3,22 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on the determination described under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

SB818,3,25 2. No credit may be allowed under this subsection if the claimant or the claimant's spouse files a claim under sub. (6e) or (9) or subch. VIII or IX that relates to the same taxable year for which a claim is made under this subsection.

SB818,4,3 3. The maximum amount of the credit that a claimant may claim under this subsection in a taxable year is $7,500 for an individual or a married couple filing jointly.

SB818,4,10 4. No claimant may claim a credit under this subsection unless the claimant is a farmer and files a schedule F for the taxable year for which the claimant claims the credit or is an entity actively engaged in farming under 7 CFR 1400.201 for that taxable year. No claimant may claim a credit under this subsection unless the claimant's annual gross income from farming for the year in which the claim relates is not less than $35,000. For purposes of this subdivision, “gross income” has the meaning given in s. 71.03 (1).

SB818,4,12 (d) Administration. 1. Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB818,4,17 2. If the allowable amount of the claim under this subsection exceeds the taxes otherwise due on the claimant's income under s. 71.02, the amount of the claim that is not used to offset those taxes shall be certified by the department of revenue to the department of administration for payment from the appropriation under s. 20.835 (2) (bh).

SB818,5 Section 5. 71.10 (4) (i) of the statutes is amended to read:

SB818,5,8 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and beyond under s. 71.613, homestead credit under subch. VIII, farmland tax relief credit under s. 71.07 (3m), dairy manufacturing facility investment credit under s. 71.07 (3p), jobs tax credit under s. 71.07 (3q), meat processing facility investment credit under s. 71.07 (3r), woody biomass harvesting and processing credit under s. 71.07 (3rm), food processing plant and food warehouse investment credit under s. 71.07 (3rn), business development credit under s. 71.07 (3y), research credit under s. 71.07 (4k) (e) 2. a., film production services credit under s. 71.07 (5f), film production company investment credit under s. 71.07 (5h), veterans and surviving spouses property tax credit under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), electronics and information technology manufacturing zone credit under s. 71.07 (3wm), beginning farmer and farm asset owner tax credit under s. 71.07 (8r), farm buildings credit under s. 71.07 (8s), earned income tax credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld under subch. X.

SB818,6 Section 6 . 71.10 (4) (i) of the statutes, as affected by 2019 Wisconsin Act 54 and 2019 Wisconsin Act .... (this act), is repealed and recreated to read:

SB818,5,20 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and beyond under s. 71.613, homestead credit under subch. VIII, farmland tax relief credit under s. 71.07 (3m), jobs tax credit under s. 71.07 (3q), business development credit under s. 71.07 (3y), research credit under s. 71.07 (4k) (e) 2. a., veterans and surviving spouses property tax credit under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), electronics and information technology manufacturing zone credit under s. 71.07 (3wm), farm buildings credit under s. 71.07 (8s), earned income tax credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and taxes withheld under subch. X.

SB818,7 Section 7. 71.21 (4) (a) of the statutes is amended to read:

SB818,5,25 71.21 (4) (a) The amount of the credits computed by a partnership under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), (8r), (8s), and (10) and passed through to partners shall be added to the partnership's income.

SB818,8 Section 8. 71.21 (4) (a) of the statutes, as affected by 2019 Wisconsin Act 54 and 2019 Wisconsin Act .... (this act), is repealed and recreated to read:

SB818,6,6 71.21 (4) (a) The amount of the credits computed by a partnership under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8s), and (10) and passed through to partners shall be added to the partnership's income.

SB818,9 Section 9. 71.26 (2) (a) 4. of the statutes is amended to read:

SB818,6,13 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (3wm), (3y), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), (8r), (8s), (9s), and (10) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).

SB818,10 Section 10 . 71.26 (2) (a) 4. of the statutes, as affected by 2019 Wisconsin Act 54 and 2019 Wisconsin Act .... (this act), is repealed and recreated to read:

SB818,6,21 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm), (1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8s), (9s), and (10) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).

SB818,11 Section 11. 71.28 (8s) of the statutes is created to read:

SB818,6,23 71.28 (8s) Farm buildings credit. (a) Definitions. In this subsection:

SB818,6,25 1. “Agricultural land” means land that is assessed as agricultural land under s. 70.32 (2) (a) 4.

SB818,7,1 2. “Claimant” means a person who files a claim under this subsection.

SB818,7,4 3. “Residential property” means property that is assessed as residential property under s. 70.32 (2) (a) 1. or a residence that is assessed as other under s. 70.32 (2) (a) 7.

SB818,7,6 4. “Used exclusively” means used to the exclusion of all other uses except for use not exceeding 5 percent of total use.

SB818,7,12 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2019, and before January 1, 2023, a claimant may claim as a credit against the taxes imposed under s. 71.23 an amount equal to the most recent assessed value of the claimant's buildings and improvements assessed as other under s. 70.32 (2) (a) 7., not including residential property, that are used exclusively for farming, multiplied by 0.01187.

SB818,7,20 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on the determination described under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

SB818,7,22 2. The maximum amount of the credit that a claimant may claim under this subsection in a taxable year is $7,500.

SB818,8,4 3. No claimant may claim a credit under this subsection unless the claimant is a farmer and files a schedule F for the taxable year for which the claimant claims the credit or is an entity actively engaged in farming under 7 CFR 1400.201 for that taxable year. No claimant may claim a credit under this subsection unless the claimant's annual gross income from farming for the year in which the claim relates is not less than $35,000. For purposes of this subdivision, “gross income” has the meaning given in s. 71.03 (1).

SB818,8,6 (d) Administration. 1. Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB818,8,11 2. If the allowable amount of the claim under this subsection exceeds the taxes otherwise due on the claimant's income under s. 71.23, the amount of the claim that is not used to offset those taxes shall be certified by the department of revenue to the department of administration for payment from the appropriation under s. 20.835 (2) (bh).

SB818,12 Section 12. 71.30 (3) (f) of the statutes is amended to read:

SB818,8,24 71.30 (3) (f) The total of farmland preservation credit under subch. IX, farmland tax relief credit under s. 71.28 (2m), dairy manufacturing facility investment credit under s. 71.28 (3p), jobs credit under s. 71.28 (3q), meat processing facility investment credit under s. 71.28 (3r), woody biomass harvesting and processing credit under s. 71.28 (3rm), food processing plant and food warehouse investment credit under s. 71.28 (3rn), enterprise zone jobs credit under s. 71.28 (3w), electronics and information technology manufacturing zone credit under s. 71.28 (3wm), business development credit under s. 71.28 (3y), research credit under s. 71.28 (4) (k) 1., film production services credit under s. 71.28 (5f), film production company investment credit under s. 71.28 (5h), beginning farmer and farm asset owner tax credit under s. 71.28 (8r), farm buildings credit under s. 71.28 (8s), and estimated tax payments under s. 71.29.

SB818,13 Section 13. 71.30 (3) (f) of the statutes, as affected by 2019 Wisconsin Act 54 and 2019 Wisconsin Act .... (this act), is repealed and recreated to read:

SB818,9,8 71.30 (3) (f) The total of farmland preservation credit under subch. IX, farmland tax relief credit under s. 71.28 (2m), jobs credit under s. 71.28 (3q), enterprise zone jobs credit under s. 71.28 (3w), electronics and information technology manufacturing zone credit under s. 71.28 (3wm), business development credit under s. 71.28 (3y), research credit under s. 71.28 (4) (k) 1., farm buildings credit under s. 71.28 (8s), and estimated tax payments under s. 71.29.

SB818,14 Section 14. 71.34 (1k) (g) of the statutes is amended to read:

SB818,9,13 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (3wm), (3y), (4), (5), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), (8r), (8s), and (10) and passed through to shareholders.

SB818,15 Section 15 . 71.34 (1k) (g) of the statutes, as affected by 2019 Wisconsin Act 54 and 2019 Wisconsin Act .... (this act), is repealed and recreated to read:

SB818,9,19 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (4), (5), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8s), and (10) and passed through to shareholders.

SB818,16 Section 16. 71.45 (2) (a) 10. of the statutes is amended to read:

SB818,9,25 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3w), (3y), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), (6n), (8r), (8s), (9s), and (10) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).

SB818,17 Section 17 . 71.45 (2) (a) 10. of the statutes, as affected by 2019 Wisconsin Act 54 and 2019 Wisconsin Act .... (this act), is repealed and recreated to read:

SB818,10,11 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8s), (9s), and (10) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).

SB818,18 Section 18. 71.47 (8s) of the statutes is created to read:

SB818,10,13 71.47 (8s) Farm buildings credit. (a) Definitions. In this subsection:

SB818,10,15 1. “Agricultural land” means land that is assessed as agricultural land under s. 70.32 (2) (a) 4.

SB818,10,16 2. “Claimant” means a person who files a claim under this subsection.

SB818,10,19 3. “Residential property” means property that is assessed as residential property under s. 70.32 (2) (a) 1. or a residence that is assessed as other under s. 70.32 (2) (a) 7.

SB818,10,21 4. “Used exclusively” means used to the exclusion of all other uses except for use not exceeding 5 percent of total use.

SB818,11,2 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2019, and before January 1, 2023, a claimant may claim as a credit against the taxes imposed under s. 71.43 an amount equal to the most recent assessed value of the claimant's buildings and improvements assessed as other under s. 70.32 (2) (a) 7., not including residential property, that are used exclusively for farming, multiplied by 0.01187.