LRBs0268/1
JK:all
2015 - 2016 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO ASSEMBLY BILL 226
January 26, 2016 - Offered by Representative Kremer.
AB226-ASA1,1,4 1An Act to amend 71.82 (1) (a), 71.82 (1) (c), 71.82 (2) (b), 71.82 (2) (d), 71.84 (1),
271.84 (2) (a), 71.84 (2) (c), 71.91 (6) (e) 3., 71.91 (6) (f) 5., 77.60 (1) (a), 77.60 (1)
3(b), 77.96 (5) and 78.68 (1); and to create 73.16 (3m) of the statutes; relating
4to:
interest rates on past due amounts.
Analysis by the Legislative Reference Bureau
Under current law, a taxpayer must pay interest on any amount owed to the
Department of Revenue that is past due, but not delinquent, at the rate of 12 percent
per year. Under the substitute amendment, DOR must reduce the interest rate on
such amounts by 0.5 percent each year until the rate equals 4 percent plus the prime
rate, as reported by the Federal Reserve Board.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB226-ASA1,1 5Section 1. 71.82 (1) (a) of the statutes is amended to read:
AB226-ASA1,2,26 71.82 (1) (a) In assessing taxes interest shall be added to such taxes at 12% the
7rate determined under s. 73.16 (3m)
per year from the date on which such taxes if

1originally assessed would have become delinquent if unpaid, to the date on which
2such taxes when subsequently assessed will become delinquent if unpaid.
AB226-ASA1,2 3Section 2. 71.82 (1) (c) of the statutes is amended to read:
AB226-ASA1,2,74 71.82 (1) (c) Any assessment made as a result of the adjustment or disallowance
5of a claim for credit under s. 71.07, 71.28 or 71.47 or subch. VIII or IX, except as
6provided in sub. (2) (c), shall bear interest at 12% the rate determined under s. 73.16
7(3m)
per year from the due date of the claim.
AB226-ASA1,3 8Section 3. 71.82 (2) (b) of the statutes is amended to read:
AB226-ASA1,2,129 71.82 (2) (b) Department may reduce delinquent interest. The department shall
10provide by rule for reduction of interest under par. (a) to 12% the rate determined
11under s. 73.16 (3m)
per year in stated instances wherein the secretary of revenue
12determines that reduction is fair and equitable.
AB226-ASA1,4 13Section 4. 71.82 (2) (d) of the statutes is amended to read:
AB226-ASA1,3,614 71.82 (2) (d) Withholding tax. Of the amounts required to be withheld any
15amount not deposited or paid over to the department within the time required shall
16be deemed delinquent and deposit reports or withholding reports filed after the due
17date shall be deemed late. Delinquent deposits or payments shall bear interest at
18the rate of 1.5% per month from the date deposits or payments are required under
19this section until deposited or paid over to the department. The department shall
20provide by rule for reduction of interest on delinquent deposits to 12% the rate
21determined under s. 73.16 (3m)
per year in stated instances wherein the secretary
22of revenue determines reduction fair and equitable. In the case of a timely filed
23deposit or withholding report, withheld taxes shall become delinquent if not
24deposited or paid over on or before the due date of the report. In the case of no report
25filed or a report filed late, withheld taxes shall become delinquent if not deposited

1or paid over by the due date of the report. In the case of an assessment under s. 71.83
2(1) (b) 2., the amount assessed shall become delinquent if not paid on or before the
3first day of the calendar month following the calendar month in which the
4assessment becomes final, but if the assessment is contested before the tax appeals
5commission or in the courts, it shall become delinquent on the 30th day following the
6date on which the order or judgment representing final determination becomes final.
AB226-ASA1,5 7Section 5. 71.84 (1) of the statutes is amended to read:
AB226-ASA1,3,158 71.84 (1) Individuals and fiduciaries. Except as provided in s. 71.09 (11), in
9the case of any underpayment of estimated tax by an individual, estate or trust,
10except as provided under s. 71.09, there shall be added to the aggregate tax for the
11taxable year interest at the rate of 12% determined under s. 73.16 (3m) per year on
12the amount of the underpayment for the period of the underpayment. In this
13subsection, "the period of the underpayment" means the time period from the due
14date of the installment until either the 15th day of the 4th month beginning after the
15end of the taxable year or the date of payment, whichever is earlier.
AB226-ASA1,6 16Section 6. 71.84 (2) (a) of the statutes is amended to read:
AB226-ASA1,4,217 71.84 (2) (a) Except as provided in s. 71.29 (7), in the case of any underpayment
18of estimated tax under s. 71.29 or 71.48 there shall be added to the aggregate tax for
19the taxable year interest at the rate of 12% determined under s. 73.16 (3m) per year
20on the amount of the underpayment for the period of the underpayment. For
21corporations, except as provided in par. (b), "period of the underpayment" means the
22time period from the due date of the installment until either the 15th day of the 3rd
23month beginning after the end of the taxable year or the date of payment, whichever
24is earlier. If 90% of the tax shown on the return is not paid by the 15th day of the 3rd
25month following the close of the taxable year, the difference between that amount

1and the estimated taxes paid, along with any interest due, shall accrue delinquent
2interest under s. 71.91 (1) (a).
AB226-ASA1,7 3Section 7. 71.84 (2) (c) of the statutes is amended to read:
AB226-ASA1,4,104 71.84 (2) (c) If a refund under s. 71.29 (3m) results in an income or franchise
5tax liability that is greater than the amount of estimated taxes paid in reduced by
6the amount of the refund, the taxpayer shall add to the aggregate tax for the taxable
7year interest at an annual rate of 12% determined under s. 73.16 (3m) on the amount
8of the unpaid tax liability for the period beginning on the date the refund is issued
9and ending on the 15th day of the 3rd month beginning after the end of the taxable
10year, or the date the tax liability is paid, whichever is earlier.
AB226-ASA1,8 11Section 8. 71.91 (6) (e) 3. of the statutes is amended to read:
AB226-ASA1,4,1712 71.91 (6) (e) 3. For purposes of an adjudication under this paragraph, the
13assessment of the tax upon which the interest or lien of the department is based is
14conclusively presumed to be valid. Interest shall be allowed for judgments under this
15paragraph at the rate of 12% determined under s. 73.16 (3m) per year from the date
16the department receives the money wrongfully levied upon to the date of payment
17of the judgment or from the date of sale to the date of payment.
AB226-ASA1,9 18Section 9. 71.91 (6) (f) 5. of the statutes is amended to read:
AB226-ASA1,5,919 71.91 (6) (f) 5. Before the sale, the department shall determine a minimum
20price for which the property shall be sold. If no person offers for that property at the
21sale at least the amount of the minimum price, the state shall purchase the property
22for the minimum price; otherwise, the property shall be sold to the highest bidder.
23In determining the minimum price, the department shall take into account the
24expense of making the levy and sale in addition to the value of the property. If
25payment in full is required at the time of acceptance of a bid and is not paid then, the

1department shall sell the property in the manner provided under this paragraph.
2If the conditions of the sale permit part of the payment to be deferred and if that part
3is not paid within the prescribed period, the department may sue the purchaser in
4the circuit court for Dane County for the unpaid part of the purchase price and
5interest at the rate of 12% determined under s. 73.16 (3m) per year from the date of
6the sale or the department may declare the sale void and may sell the property again
7under this paragraph. If the property is sold again, the 2nd purchaser shall receive
8it free of any claim of the defaulting purchaser and the amount paid upon the bid
9price by the defaulting purchaser is forfeited.
AB226-ASA1,10 10Section 10. 73.16 (3m) of the statutes is created to read:
AB226-ASA1,5,2011 73.16 (3m) Calculation of interest rates. Beginning on October 1, 2017, and
12on each October 1 thereafter, the department shall determine and publish an interest
13rate that is applicable to unpaid amounts owed to the department that become due
14in the next calendar year. The rate in effect on January 1, 2018, is 11.5 percent. The
15department shall reduce the rate by 0.5 percent on January 1 of each year until the
16rate equals the sum of 4 percent and the federal short-term rate in effect on July 1
17of the year immediately preceding the calendar year for which the department is
18determining the rate. A change in the interest rate under this subsection applies to
19any outstanding tax balance owed to the department that is not delinquent
20regardless of the rate in effect at the time that the tax accrued.
AB226-ASA1,11 21Section 11. 77.60 (1) (a) of the statutes is amended to read:
AB226-ASA1,6,522 77.60 (1) (a) Except as provided in par. (b), unpaid taxes shall bear interest at
23the rate of 12% determined under s. 73.16 (3m) per year from the due date of the
24return until paid or deposited with the department. Taxes refunded to the seller
25shall bear interest at 3 percent per year from the due date of the return to the date

1on which the refund is certified on the refund rolls. An extension of time within
2which to file a return shall not extend the due date of the return for purposes of
3interest computation. Taxes refunded to the buyer shall bear interest at 3 percent
4per year from the last day of the month following the month during which the buyer
5paid the tax to the date on which the refund is certified on the refund rolls.
AB226-ASA1,12 6Section 12. 77.60 (1) (b) of the statutes is amended to read:
AB226-ASA1,6,137 77.60 (1) (b) Any unpaid taxes for a calendar year or a fiscal year resulting from
8 a field an audit under s. 77.59 shall bear interest at the rate of 12% determined under
9s. 73.16 (3m)
per year from the due date of the taxpayer's Wisconsin income or
10franchise tax return for that calendar or fiscal year or, if exempt, from the 15th day
11of the 4th month of the year after the close of the calendar or fiscal year for which the
12taxes are due to the date on which the taxes are paid or, if unpaid, become delinquent,
13whichever is earlier.
AB226-ASA1,13 14Section 13. 77.96 (5) of the statutes is amended to read:
AB226-ASA1,6,1915 77.96 (5) Each person subject to a surcharge under s. 77.93 shall, on or before
16the due date, including extensions, for filing under ch. 71, file an accurate statement
17of its gross tax liability. Payments made after the due date under sub. (2) and on or
18before the due date under this subsection are not delinquent but are subject to
19interest at the rate of 12% determined under s. 73.16 (3m) per year.
AB226-ASA1,14 20Section 14. 78.68 (1) of the statutes is amended to read:
AB226-ASA1,7,221 78.68 (1) Unpaid taxes shall bear interest at the rate of 12% determined under
22s. 73.16 (3m)
per year from the due date of the tax until paid or deposited with the
23department, and all refunded taxes bear interest at the rate of 3 percent per year

1from the due date of the return to the date on which the refund is certified on the
2refund rolls.
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