(1)    Imposition. If the tax imposed on a natural person, married couple filing jointly, trust, or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dx), (2dy), (3m), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (5b), (5d), (5i), (5j), (5n), (6), (6e), (8b), (9e), (9m), and (9r), 71.28 (1dx), (1dy), (2m), (3), (3n), (3t), (3w), (3wm), and (3y), 71.47 (1dx), (1dy), (2m), (3), (3n), (3t), (3w), and (3y), 71.57 to 71.61, and 71.613 and subch. VIII and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:

      (a)    Adjust the alternative minimum taxable income, as defined in section 55 (b) (2) of the internal revenue code, by the amounts under s. 71.05 (6) to (21), except s. 71.05 (6) (a) 13. and (b) 5. and (8), by the amounts needed to modify federal alternative tax net operating loss deductions to reflect differences between Wisconsin net operating loss deductions and federal net operating loss deductions for minimum tax purposes. The department of revenue shall by rule define Wisconsin net operating loss deductions for minimum tax purposes.

      (b)    Subtract the amount under section 57 (a) (5) of the internal revenue code from the amount under par. (a).

      (bm)    For stocks acquired after December 31, 1987, under incentive stock options, as defined in section 422A (b) of the internal revenue code:

         1.    At the time that the incentive stock option is included in alternative minimum taxable income under section 56 (b) (3) of the internal revenue code, subtract from the amount in par. (b) 20 percent of the amount included in federal alternative minimum taxable income under section 56 (b) (3) of the internal revenue code.

         2.    At the time that the stock that was subject to subd. 1. is disposed of, add 20 percent of the gain or loss adjustment resulting from the basis adjustment made under section 56 (b) (3) of the internal revenue code to the amount in par. (b).

      (c)    For nonresidents and part-year residents, adjust the amount under par. (bm) so that itemized deductions and personal exemptions are prorated on the basis of the ratio of Wisconsin adjusted gross income to federal adjusted gross income.

      (d)    Subtract from the amount under par. (c) the appropriate amount under section 55 (d) 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) 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.

      (e)    Multiply the amount under par. (d) by 6.5 percent.

   (2)   Joint liability. If the requirements under sub. (1) are applicable and the spouses file a joint income tax return, they shall file a joint minimum tax return and are jointly and severally liable for the tax imposed under sub. (1) and for the interest, penalties, fees, additions to tax and additional assessments with respect to the tax.

   (3)   Administration. The department of revenue shall have full power to impose, enforce and collect the minimum tax provided in this section and may take any action, conduct any proceeding and in all respects proceed as it is authorized in respect to income taxes imposed in this chapter. The income tax provisions in this chapter relating to assessments, refunds, appeals, collection, interest and penalties shall apply to the minimum tax.

   (4)   Tax benefit rule. The department of revenue shall promulgate rules to provide that the amount under sub. (1) may be reduced to prevent the inclusion of any amounts, except the federal standard deductions, itemized deductions and personal exemptions, that do not reflect a benefit in respect to the tax imposed under s. 71.02.

   (5)   Sunset. This section does not apply to taxable years beginning after December 31.