April 3, 2025 - Introduced by Senators Quinn, James, Carpenter, Dassler-Alfheim, Habush Sinykin, Keyeski, Ratcliff, Wall and Wirch, cosponsored by Representatives Armstrong, Green, Bare, Goodwin, Gundrum, B. Jacobson, Kitchens, Kreibich, Krug, Penterman, Piwowarczyk, Subeck and Tenorio. Referred to Committee on Insurance, Housing, Rural Issues and Forestry.
SB178,1,5
1An Act to renumber 76.639 (3); to amend 71.07 (8b) (a) 7., 71.07 (8b) (c) 2., 271.28 (8b) (a) 7., 71.28 (8b) (c) 2., 71.47 (8b) (a) 7., 71.47 (8b) (c) 2., 76.639 (1) 3(g), 76.67 (2) and 234.45 (1) (e); to create 76.639 (3) (b), 234.45 (1) (em) and 4234.45 (5m) of the statutes; relating to: changes to the low-income housing
5tax credit. Analysis by the Legislative Reference Bureau
Under current law, the Wisconsin Housing and Economic Development Authority administers a low-income housing tax credit program. Under that program, a person may claim as a credit against the person’s income or franchise tax liability, or against the person’s liability for fees imposed on an insurer, the amount allocated by WHEDA in an “allocation certificate” for a qualified low-income housing project.
The bill also requires that WHEDA, if possible, ensure that at least 35 percent of the tax credits it allocates each year under the program are for qualified low-income housing projects in rural areas in Wisconsin and removes the requirement that a qualified low-income housing project be financed with tax-exempt bonds.
Finally, the bill makes a technical change to the credit for insurers so that an insurer who is a shareholder of a tax-option corporation, a partner of a partnership, or a member of a limited liability company may claim the credit.
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:
SB178,1
1Section 1. 71.07 (8b) (a) 7. of the statutes is amended to read: SB178,2,5271.07 (8b) (a) 7. “Qualified development” means a qualified low-income 3housing project under section 42 (g) of the Internal Revenue Code that is financed 4with tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, 5and located in this state. SB178,26Section 2. 71.07 (8b) (c) 2. of the statutes is amended to read: SB178,3,7771.07 (8b) (c) 2. A partnership, limited liability company, or tax-option 8corporation may not claim the credit under this subsection. The partners of a 9partnership, members of a limited liability company, or shareholders in a tax-option 10corporation may claim the credit under this subsection based on eligible costs 11incurred by the partnership, limited liability company, or tax-option corporation. 12The partnership, limited liability company, or tax-option corporation shall calculate 13the amount of the credit that may be claimed by each partner, member, or 14shareholder and shall provide that information to the partner, member, or 15shareholder. For shareholders of a tax-option corporation, the credit may be 16allocated in proportion to the ownership interest of each shareholder. Credits 17computed by a partnership or limited liability company may be claimed in 18proportion to the ownership interests of the partners or members or allocated to 19partners or members as provided in a written agreement among the partners or
1members that is entered into no later than the last day of the taxable year of the 2partnership or limited liability company, for which the credit is claimed. Any 3partner or member who claims the credit as allocated by a written agreement shall 4provide a copy of the agreement with the tax return on which the credit is claimed. 5A Except as provided in s. 71.745, a person claiming the credit as provided under 6this subdivision is solely responsible for any tax liability arising from a dispute with 7the department of revenue related to claiming the credit. SB178,38Section 3. 71.28 (8b) (a) 7. of the statutes is amended to read: SB178,3,12971.28 (8b) (a) 7. “Qualified development” means a qualified low-income 10housing project under section 42 (g) of the Internal Revenue Code that is financed 11with tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, 12and located in this state. SB178,413Section 4. 71.28 (8b) (c) 2. of the statutes is amended to read: SB178,4,91471.28 (8b) (c) 2. A partnership, limited liability company, or tax-option 15corporation may not claim the credit under this subsection. The partners of a 16partnership, members of a limited liability company, or shareholders in a tax-option 17corporation may claim the credit under this subsection based on eligible costs 18incurred by the partnership, limited liability company, or tax-option corporation. 19The partnership, limited liability company, or tax-option corporation shall calculate 20the amount of the credit that may be claimed by each partner, member, or 21shareholder and shall provide that information to the partner, member, or 22shareholder. For shareholders of a tax-option corporation, the credit may be 23allocated in proportion to the ownership interest of each shareholder. Credits 24computed by a partnership or limited liability company may be claimed in
1proportion to the ownership interests of the partners or members or allocated to 2partners or members as provided in a written agreement among the partners or 3members that is entered into no later than the last day of the taxable year of the 4partnership or limited liability company, for which the credit is claimed. Any 5partner or member who claims the credit as allocated by a written agreement shall 6provide a copy of the agreement with the tax return on which the credit is claimed. 7A Except as provided in s. 71.745, a person claiming the credit as provided under 8this subdivision is solely responsible for any tax liability arising from a dispute with 9the department of revenue related to claiming the credit. SB178,510Section 5. 71.47 (8b) (a) 7. of the statutes is amended to read: SB178,4,141171.47 (8b) (a) 7. “Qualified development” means a qualified low-income 12housing project under section 42 (g) of the Internal Revenue Code that is financed 13with tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, 14and located in this state. SB178,615Section 6. 71.47 (8b) (c) 2. of the statutes is amended to read: SB178,5,111671.47 (8b) (c) 2. A partnership, limited liability company, or tax-option 17corporation may not claim the credit under this subsection. The partners of a 18partnership, members of a limited liability company, or shareholders in a tax-option 19corporation may claim the credit under this subsection based on eligible costs 20incurred by the partnership, limited liability company, or tax-option corporation. 21The partnership, limited liability company, or tax-option corporation shall calculate 22the amount of the credit that may be claimed by each partner, member, or 23shareholder and shall provide that information to the partner, member, or 24shareholder. For shareholders of a tax-option corporation, the credit may be
1allocated in proportion to the ownership interest of each shareholder. Credits 2computed by a partnership or limited liability company may be claimed in 3proportion to the ownership interests of the partners or members or allocated to 4partners or members as provided in a written agreement among the partners or 5members that is entered into no later than the last day of the taxable year of the 6partnership or limited liability company, for which the credit is claimed. Any 7partner or member who claims the credit as allocated by a written agreement shall 8provide a copy of the agreement with the tax return on which the credit is claimed. 9A Except as provided in s. 71.745, a person claiming the credit as provided under 10this subdivision is solely responsible for any tax liability arising from a dispute with 11the department of revenue related to claiming the credit. SB178,712Section 7. 76.639 (1) (g) of the statutes is amended to read: SB178,5,161376.639 (1) (g) “Qualified development” means a qualified low-income housing 14project under section 42 (g) of the Internal Revenue Code that is financed with tax-15exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and 16located in this state. SB178,817Section 8. 76.639 (3) of the statutes is renumbered 76.639 (3) (a). SB178,918Section 9. 76.639 (3) (b) of the statutes is created to read: SB178,6,111976.639 (3) (b) A partnership, limited liability company, or tax-option 20corporation may not claim the credit under this section. An insurer, if a partner of 21a partnership, member of a limited liability company, or shareholder in a tax-option 22corporation, may claim the credit under this section based on eligible costs incurred 23by the partnership, limited liability company, or tax-option corporation. The 24partnership, limited liability company, or tax-option corporation shall calculate the
1amount of the credit that may be claimed by the insurer as a partner, member, or 2shareholder and shall provide that information to the insurer. If an insurer is a 3shareholder of a tax-option corporation, the credit may be allocated in proportion to 4its ownership interest as a shareholder. If an insurer is a partner of a partnership 5or member of a limited liability company, credits may be claimed in proportion to 6the insurer’s ownership interest or allocated to the insurer as provided in a written 7agreement among the partners or members that is entered into no later than the 8last day of the taxable year of the partnership or limited liability company for which 9the credit is claimed. Any insurer who claims the credit as allocated by a written 10agreement shall provide a copy of the agreement with the tax return on which the 11credit is claimed. SB178,1012Section 10. 76.67 (2) of the statutes is amended to read: SB178,6,231376.67 (2) If any domestic insurer is licensed to transact insurance business in 14another state, this state may not require similar insurers domiciled in that other 15state to pay taxes greater in the aggregate than the aggregate amount of taxes that 16a domestic insurer is required to pay to that other state for the same year less the 17credits under ss. 76.635, 76.636, 76.637, 76.638, 76.639, and 76.655, except that the 18amount imposed shall not be less than the total of the amounts due under ss. 76.65 19(2) and 601.93 and, if the insurer is subject to s. 76.60, 0.375 percent of its gross 20premiums, as calculated under s. 76.62, less offsets allowed under s. 646.51 (7) or 21under ss. 76.635, 76.636, 76.637, 76.638, 76.639, and 76.655 against that total, and 22except that the amount imposed shall not be less than the amount due under s. 23601.93. SB178,11
1Section 11. 234.45 (1) (e) of the statutes is amended to read: SB178,7,52234.45 (1) (e) “Qualified development” means a qualified low-income housing 3project under section 42 (g) of the Internal Revenue Code that is financed with tax-4exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and 5located in this state. SB178,126Section 12. 234.45 (1) (em) of the statutes is created to read: SB178,7,97234.45 (1) (em) “Rural area” means a city, village, or town in this state that 8has a population of fewer than 10,000 and that is at least 10 miles from any city, 9village, or town that has a population of at least 50,000. SB178,1310Section 13. 234.45 (5m) of the statutes is created to read: SB178,7,1511234.45 (5m) Preference for rural communities. (a) Beginning on 12January 1, 2025, in approving applications for allocation certificates under sub. (3), 13the authority shall ensure that at least 35 percent of the value of all state tax 14credits the authority allocates each year are for qualified developments located in 15rural areas. SB178,7,2116(b) Paragraph (a) does not apply in any year in which the authority cannot 17satisfy the 35 percent allocation threshold because the authority does not receive a 18sufficient number of applications for allocation certificates for qualified 19developments located in rural areas that have timely submitted complete 20applications that meet all threshold requirements of the applicable qualified 21allocation plan as determined by the authority. SB178,1422Section 14. Initial applicability. SB178,8,2
1(1) The treatment of ss. 71.07 (8b) (a) 7., 71.28 (8b) (a) 7., 71.47 (8b) (a) 7., and 276.639 (1) (g) first applies to taxable years beginning after December 31, 2024.
