2017 - 2018 LEGISLATURE
March 2, 2017 - Introduced by Senator Marklein, cosponsored by Representatives
Novak, E. Brooks, Ripp, Skowronski and Spiros. Referred to Committee on
Revenue, Financial Institutions and Rural Issues.
1An Act to repeal
74.41 (2) (a);
to renumber and amend
71.255 (2) (c), 71.34 2
(1k) (h), 125.02 (18), 139.11 (4) (a) and 196.025 (6) (d) 2.; to consolidate,
3renumber and amend
196.025 (6) (d) (intro.) and 1.; to amend
70.52, 71.05 4
(25) (a) 2., 71.255 (7) (b) 7., 74.41 (2) (intro.), 74.41 (2) (b), 77.51 (5), 77.51 (11d), 5
77.54 (30) (a) 6., 77.70, 77.76 (3), 77.82 (8), 77.98 (3), 77.98 (4) (a), 125.29 (6), 6
139.38 (6), 139.82 (6), 177.24 (3) (a), 196.025 (6) (b) 1., 196.025 (6) (b) 2., 196.025 7
(6) (c) 2., 565.02 (1) (c), 565.02 (2) (d), 565.25 (4) and 565.30 (5); and to create
71.05 (25) (a) 1m., 71.05 (26) (a) 2m., 71.255 (2) (c) 2., 71.255 (2) (c) 3., 71.34 (1k) 9
(h) 1., 71.34 (1k) (h) 2., 74.41 (2) (bm), 77.51 (13) (fm), 77.51 (17g), 77.52 (2m) 10
(am), 77.52 (4), 77.54 (30) (g), 77.54 (64), 125.02 (18) (a) to (h), 139.11 (4) (a) 2., 11
177.24 (3) (c), 196.025 (6) (cm), 565.01 (6p), 565.17 (1m) and 565.40 (3) of the 12
statutes; relating to: tax administration changes, the police and fire protection
13fee, defining restaurant for purposes of alcohol beverage regulation, lottery
1ticket couriers, background investigations of persons associated with the
2lottery, and providing a criminal penalty.
Analysis by the Legislative Reference Bureau
This bill makes various changes to laws administered by the Department of
The bill creates a sales and use tax exemption for patient health care records
sold to the patient or a person that the patient authorizes to receive the records. The
exemption is consistent with a recent Tax Appeals Commission decision. See Cannon
& Dunphy, S.C. v. Wisconsin Dept. of Revenue (CCH 401-970).
The bill also provides that tangible personal property transferred by a service
provider in conjunction with the sale of a service is not considered incidental to the
sale if the seller charges a separate and optional fee for the transferred property.
With regard to the county sales tax, the bill prohibits DOR from acting on any
claim for a refund or adjustment of the tax after the end of the year that is four years
after the year in which the county enacts an ordinance to repeal the tax.
The bill also replaces an obsolete reference to the definition of “active foreign
business income” under the Internal Revenue Code with the actual language of that
definition that existed prior to 2011. In addition, the bill modifies the law related to
filing informational returns for the payment of wages, salaries, commissions,
bonuses, and rent so that the same provisions that apply to individuals and
corporations apply to tax-options corporations.
For purposes of claiming a capital gains income tax deferral or exclusion based
on investments in a qualified business, the bill defines “investment” as amounts paid
to acquire stock or other ownership interest in a partnership, corporation, tax-option
corporation, or limited liability company treated as a partnership or corporation.
Under the bill, with regard to the administration of various excise taxes, DOR
must publish on its Internet site a list of persons holding valid permits for the sale
of cigarettes, tobacco products, and fermented malt beverages.
Finally, the bill makes technical changes related to the property tax assessment
roll, filing duplicate paperwork with DOR regarding managed forest land, the
charge-back of refunded or rescinded property taxes, the sales and use tax
exemption for fuel and electricity consumed in manufacturing, and the
administration of the food and beverage taxes imposed by an exposition district.
The bill does not require DOR to pay interest to a person who receives the
person's previously unclaimed property from the state if that property is a U.S.
savings bond. Under current law, DOR pays interest on unclaimed property received
by a claimant if the property was interest bearing to the owner on the date that the
person holding the property surrendered it to DOR.
The bill explicitly prohibits the operation of a ticket courier service to sell
Wisconsin lottery tickets. Under the bill, a ticket courier service is a service operated
for the purpose of purchasing Wisconsin lottery tickets on behalf of individuals
located within or outside Wisconsin and delivering or transmitting those tickets, or
electronic images of those tickets, to those individuals as a for-profit, business
service. Currently, the Wisconsin Constitution generally prohibits the purchase of
Wisconsin lottery tickets or participation in the lottery by use of the telephone,
computer, or other electronic, telecommunication, video, or technological aid.
The bill specifies that DOR, with assistance of the Department of Justice, must
repeat, every five years, the background investigation of lottery employees, the
lottery administrator, and lottery vendors and certain associates of vendors. The bill
also allows DOR, with assistance from DOJ, to conduct initial background
investigations of any person who may come into contact with sensitive information
associated with the lottery and any person who may have access to secured areas and
requires DOR, with assistance from DOJ, to repeat the background investigation
every five years.
The bill changes from $1,000 to $600 the amount of lottery prize winnings for
which the lottery administrator must report the amounts of the winnings for the
purpose of determining whether the winner owes taxes or delinquent child support.
DOR must withhold the owed taxes or child support from the lottery winnings.
Police and fire protection fee
This bill makes changes to the administration of a fee charged for phone line
connections and prepaid wireless telecommunications plans. Under current law, the
Public Service Commission charges a communications provider or retailer a fee,
known as the police and fire protection fee, for each phone line connection or prepaid
wireless telecommunications plan provided by the communications provider or
retailer. Current law also provides that the PSC may contract with DOR only for the
collection of the fee for prepaid wireless telecommunications plans. The bill allows
the PSC to contract with DOR to administer the collection of the fee for each phone
line connection. If the PSC contracts with DOR for the collection of the fee, DOR may
require communications providers and retailers to register with DOR, conduct
audits of communications providers and retailers to ensure compliance with the fee,
and collect delinquent fee payments. The bill provides that a communications
provider or retailer may request a redetermination of the fee from DOR and may file
an objection to that redetermination with the PSC.
Alcohol regulation; restaurants
This bill changes the definition of “restaurant” for purposes relating to the
licensing and regulation of alcohol beverage establishments, and makes a change to
correspond to this definitional change. Under the bill, a place where meals are
prepared or served or sold to the general public may qualify as a restaurant even if
this is not the predominant activity at that place.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
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:
70.52 of the statutes is amended to read:
270.52 Clerks to examine and correct rolls.
Each city, village, and town 3
clerk upon receipt of the assessment roll shall carefully examine the roll. The clerk 4
shall correct all double assessments, imperfect descriptions,
and other errors 5
apparent upon the face of on
the roll, and strike off all correct the value of
parcels of 6
real property not liable to taxation. The clerk shall add to the roll any parcel of real 7
property not listed on the assessment roll
or item of personal property omitted by the
8assessors from the roll
and immediately notify the assessors of the additions and 9
omissions. The assessors shall immediately view and value the omitted property and 10
certify the valuation to the clerk. The clerk shall enter the valuation upon and
11property classification on
the roll, and the valuation shall be final. To enable the 12
clerk to properly correct defective descriptions, the clerk may request aid, when 13
necessary, from the county surveyor, whose fees for the services rendered shall be 14
paid by the city, village, or town.
71.05 (25) (a) 1m. of the statutes is created to read:
(a) 1m. “Investment” means amounts paid to acquire stock or other 17
ownership interest in a partnership, corporation, tax-option corporation, or limited 18
liability company treated as a partnership or corporation.
71.05 (25) (a) 2. of the statutes is amended to read:
(a) 2. “Qualifying gain" means a long-term capital gain under the 2
Internal Revenue Code realized from the sale of an investment made after December 3
31, 2010, and held for at least 5 uninterrupted years in a business that for the year 4
of investment and at least 2 of the 4 subsequent years was a qualified Wisconsin 5
business; except that a qualifying gain may not include any amount for which the 6
claimant claimed a subtraction under sub. (24) (b) or any gain described under sub. 7
(26) (b) and may not exceed the fair market value of the investment on the date sold,
8less the fair market value of the investment on the date acquired
71.05 (26) (a) 2m. of the statutes is created to read:
(a) 2m. “Investment” means amounts paid to acquire stock or other 11
ownership interest in a partnership, corporation, tax-option corporation, or limited 12
liability company treated as a partnership or corporation.
71.255 (2) (c) of the statutes is renumbered 71.255 (2) (c) 1. and 14
amended to read:
(c) 1. Except as provided in par. (d), if 80 percent or more of a 16
corporation's worldwide income is active foreign business income,
as defined in
17section 861 (c) (1) (B) of the Internal Revenue Code,
the income and apportionment 18
factor or factors of the corporation shall not be included in the combined report, but 19
the corporation shall compute and allocate or apportion its income from the unitary 20
71.255 (2) (c) 2. of the statutes is created to read:
(c) 2. For purposes of subd. 1., “active foreign business income” 23
means gross income derived from sources outside the United States, as determined 24
in subchapter N of the Internal Revenue Code, including income of a subsidiary
corporation, and attributable to the active conduct of a trade or business in a foreign 2
country or in a U.S. possession.
71.255 (2) (c) 3. of the statutes is created to read:
(c) 3. For purposes of subd. 2., a corporation is considered a 5
subsidiary if the parent corporation owns, directly or indirectly, stock with at least 6
50 percent of the total voting power of the corporation and the stock has a value equal 7
to at least 50 percent of the total value of the stock of the corporation.
71.255 (7) (b) 7. of the statutes is amended to read:
(b) 7. Executing waivers, closing agreements, powers of attorney, 10
and other documents as necessary or required regarding the combined report filed 11
under sub. (2) (a). Any waiver, agreement, power of attorney, or document executed 12
by the designated agent relating to a combined report
shall be considered as executed 13
by all members of the combined group, including any corporation not included in the
14combined report that the department asserts is a member of the combined group
71.34 (1k) (h) of the statutes is renumbered 71.34 (1k) (h) (intro.) 16
and amended to read:
(h) (intro.) Section 162 of the
internal revenue code Internal
(relating to trade or business expenses) is modified
so as follows:
that payments for wages, salaries, bonuses, interest or other expenses 20
paid to an entertainer or entertainment corporation may be deducted only if the 21
corporation complies with ss. 71.63 (3) (b), 71.64 (4) and (5)
and 71.80 (15) (e).