Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB172 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 172
5	5	April 10, 2023 - Introduced by Representatives SORTWELL, BEHNKE, EDMING, GREEN
6	6	and RETTINGER, cosponsored by Senators TOMCZYK and NASS. Referred to
7	7	Committee on Jobs, Economy and Small Business Development.
8	8	*AUTHORS SUBJECT TO CHANGE*
9	9	AN ACT to create 71.07 (11), 71.10 (4) (ga) and 238.165 of the statutes; relating
10	10	to: a sole proprietor employee tax credit and granting rule-making authority.
11	11	Analysis by the Legislative Reference Bureau
12	12	This bill creates a tax credit program administered by the Wisconsin Economic
13	13	Development Corporation under which a sole proprietor may receive tax credits in
14	14	connection with the first full-time employee employed by the sole proprietor.
15	15	Specifically, under the bill, WEDC may certify a sole proprietor in Wisconsin to
16	16	claim a nonrefundable credit to offset income taxes as follows:
17	17	1. For the first taxable year during which the sole proprietor employs an
18	18	eligible employee for that entire year, an amount equal to 100 percent of the wages
19	19	paid that employee in that year or $10,000, whichever is less.
20	20	2. For the second taxable year during which the applicant employs an eligible
21	21	employee for that entire year, an amount equal to 50 percent of the wages paid that
22	22	employee in that year or $5,000, whichever is less.
23	23	3. For the third taxable year during which the applicant employs an eligible
24	24	employee for that entire year, an amount equal to 25 percent of the wages paid that
25	25	employee in that year or $2,500, whichever is less.
26	26	An employee is eligible under the bill if he or she is the first employee employed
27	27	by the sole proprietor in a full-time job who is not the sole proprietor or a member
28	28	of the sole proprietor's immediate family. The bill defines “full-time job" to mean a
29	29	regular, nonseasonal full-time position in which an individual, as a condition of
30	30	employment, is required to work at least 2,080 hours per year, including paid leave
31	31	and holidays, and for which the individual receives pay that is equal to at least 150
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36	36	percent of the federal minimum wage. Finally, the maximum amount of the credit
37	37	that all sole proprietors may claim in all taxable years is $20,000,000. Under the bill,
38	38	if in any taxable year the amount of the claims exceed the maximum allowable
39	39	amount of $20,000,000, the Department of Revenue must prorate the amount that
40	40	each taxpayer may claim.
41	41	For further information see the state fiscal estimate, which will be printed as
42	42	an appendix to this bill.
43	43	The people of the state of Wisconsin, represented in senate and assembly, do
44	44	enact as follows:
45	45	SECTION 1. 71.07 (11) of the statutes is created to read:
46	46	71.07 (11) SOLE PROPRIETOR EMPLOYEE TAX CREDIT. (a) Definitions. In this
47	47	subsection:
48	48	1. “Claimant” means a person certified to receive tax benefits under s. 238.165.
49	49	2. “Eligible employee” has the meaning given in s. 238.165 (1) (b).
50	50	(b) Filing Claims. For taxable years beginning after December 31, 2022, and
51	51	subject to the limitations provided in this subsection and s. 238.165, a claimant may
52	52	claim as a credit against the tax imposed under s. 71.02 an amount as follows:
53	53	1. For the first taxable year during which the claimant employs an eligible
54	54	employee for that entire year, 100 percent of the wages paid to that employee, not to
55	55	exceed $10,000, as determined by the Wisconsin Economic Development Corporation
56	56	under s. 238.165.
57	57	2. For the second taxable year during which the claimant employs an eligible
58	58	employee for that entire year, 50 percent of the wages paid to that employee in that
59	59	year, not to exceed $5,000, as determined by the Wisconsin Economic Development
60	60	Corporation under s. 238.165.
61	61	3. For the third taxable year during which the claimant employs an eligible
62	62	employee for that entire year, 25 percent of the wages paid to that employee in that
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83	83	SECTION 1
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85	85	year, not to exceed $2,500, as determined by the Wisconsin Economic Development
86	86	Corporation under s. 238.165.
87	87	(c) Limitations. 1. No credit may be allowed under this subsection unless the
88	88	claimant includes with the claimant's return a copy of the claimant's certification for
89	89	tax benefits under s. 238.165.
90	90	2. No credit my be allowed under this subsection unless it is claimed within the
91	91	time period under s. 71.75 (2).
92	92	3. The maximum amount of the credit that all claimants may claim under this
93	93	subsection in all taxable years is $20,000,000. In any taxable year in which the total
94	94	amount of the credits claimed exceeds the amount available under the cap under this
95	95	subdivision, the department shall prorate the amount of the credit allowed to each
96	96	claimant in the proportion that the amount available under the cap bears to the total
97	97	amount of the credits claimed.
98	98	(d) Administration. Subsection (9e) (d), to the extent that it applies to the credit
99	99	under that subsection, applies to the credit under this subsection.
100	100	SECTION 2. 71.10 (4) (ga) of the statutes is created to read:
101	101	71.10 (4) (ga) Sole proprietor employee tax credit under s. 71.07 (11).
102	102	SECTION 3. 238.165 of the statutes is created to read:
103	103	238.165 Sole proprietor employee tax credit. (1) DEFINITIONS. In this
104	104	section:
105	105	(a) “Eligible applicant” means a sole proprietor that is eligible to receive tax
106	106	benefits under this section.
107	107	(b) “Eligible employee” means the first person, other than the sole proprietor
108	108	or a member of the sole proprietor's immediate family, who is employed in a full-time
109	109	job by the sole proprietor.
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137	137	(c) “Full-time job" means a regular, nonseasonal full-time position in which an
138	138	individual, as a condition of employment, is required to work at least 2,080 hours per
139	139	year, including paid leave and holidays, and for which the individual receives pay
140	140	that is equal to at least 150 percent of the federal minimum wage.
141	141	(d) “Immediate family" means persons who are related as spouses, as siblings,
142	142	or as parent and child.
143	143	(e) “Tax benefits” means the sole proprietor employee tax credit under under
144	144	s. 71.07 (11).
145	145	(2) CERTIFICATION ELIGIBILITY. An applicant for tax benefits under this section
146	146	is eligible for certification under sub. (3), subject to verification under the rules
147	147	promulgated under sub. (4), if all of the following apply:
148	148	(a) The applicant is a sole proprietor in this state.
149	149	(b) No sole proprietorship owned by the applicant has received tax benefits
150	150	under this section.
151	151	(3) CERTIFICATION. The corporation shall certify an eligible applicant to claim
152	152	tax benefits as follows:
153	153	(a) For the first taxable year during which the applicant employs an eligible
154	154	employee for that entire year, an amount equal to 100 percent of the wages paid that
155	155	employee in that year or $10,000, whichever is less.
156	156	(b) For the second taxable year during which the applicant employs an eligible
157	157	employee for that entire year, an amount equal to 50 percent of the wages paid that
158	158	employee in that year or $5,000, whichever is less.
159	159	(c) For the third taxable year during which the applicant employs an eligible
160	160	employee for that entire year, an amount equal to 25 percent of the wages paid that
161	161	employee in that year or $2,500, whichever is less.
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189	189	SECTION 3
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191	191	(4) RULES. The corporation shall promulgate rules to verify the accuracy of all
192	192	information provided by an applicant for tax benefits under this section.
193	193	(END)
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