Individual Income tax rates
Under current law, there are four income tax brackets for single individuals,
certain fiduciaries, heads of households, and married persons. The brackets are
indexed for inflation. The rate of taxation under current law for the lowest bracket
for single individuals, certain fiduciaries, heads of households, and married persons
is 4.40 percent of taxable income; the rate for the second bracket is 5.84 percent; the
rate for the third bracket is 6.27 percent; and the rate for the highest bracket is 7.65
percent. Before applying bracket indexing, the four brackets for individuals, certain
fiduciaries, and heads of households, to which the above rates apply, are as follows:
taxable income from $0 to $7,500; taxable income exceeding $7,500 but not exceeding
$15,000; taxable income exceeding $15,000 but not exceeding $225,000; and taxable
income exceeding $225,000.
This rate and bracket structure first applies to taxable year 2013, and was
enacted in 2013 Wisconsin Act 20, the state budget bill.
For taxable years beginning after December 31, 2013, this bill lowers the rate
of taxation for the lowest tax bracket. Under the bill, the rate of taxation for the
lowest bracket for single individuals, certain fiduciaries, heads of households, and
married persons is 4.0 percent of taxable income.
technical college system
This bill provides property tax relief aid to technical college districts,
distributed annually to each district on the basis of its equalized value as compared
to the equalized value of all technical college districts as of January 2014. The first
distribution is in February 2015.
The bill eliminates the current limit on a technical college district's tax levy and
imposes, instead, a revenue limit. Under the bill, with certain exceptions, a district
board's revenue (defined as the sum of its tax levy for operations and the amount of
property tax relief aid it receives) in the 2014-15 school year or any school year
thereafter may not exceed its revenue in the previous school year increased by the
district's valuation factor, which is the percentage change in the district's equalized
value due to new construction, less improvements removed.
net operating losses
Under current law, for income tax purposes, under certain circumstances, a
taxpayer may claim a Wisconsin net operating loss against Wisconsin taxable income
of the two years preceding the year in which the taxpayer sustained the loss. This
bill clarifies that a taxpayer need not make an offset against Wisconsin modified
taxable income of the two years preceding the loss, if the taxpayer chooses not to
carry back the net operating loss to the two years preceding the loss.

tax credits
Under current law, a person may claim the jobs tax credit if the Wisconsin
Economic Development Corporation certifies the person to receive the tax credit, the
person increases net employment in the person's business, and the person provides
certain wages or job training to its full-time employees. This bill specifies that to be
eligible for the jobs tax credit a person must increase net employment in the person's
business in this state. Therefore, under the bill, a person may qualify for the jobs tax
credit by relocating existing jobs to this state even if the number of individuals the
person's business employs nationwide does not increase. Similarly, under the bill,
a person does not qualify for the jobs tax credit by increasing the number of
individuals the person's business employs nationwide if the number of individuals
the person's business employs in this state does not increase.
Under current law, for income and franchise tax purposes, a taxpayer may not
claim a relocated business deduction or tax credit for taxable years beginning after
December 31, 2013. Under this bill, a taxpayer who is first eligible to claim a
relocated business deduction or tax credit for a taxable year beginning after
December 31, 2012, and before January 1, 2014, may claim the deduction or credit
in the following taxable year.
The bill also provides that the manufacturing and agriculture credit, the
research credit, and the state historic rehabilitation credit may be claimed against
the alternative minimum tax.
Finally, the bill makes technical changes to the electronic medical records tax
credit and to the sales and use tax exemption for tangible personal property used in
commercial printing.
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:
AB1,1 1Section 1. 20.292 (1) (dp) of the statutes is created to read:
AB1,3,42 20.292 (1) (dp) Property tax relief aid. A sum sufficient equal to the amount
3necessary to distribute the property tax relief aid to technical college districts under
4s. 38.16 (4).
AB1,2 5Section 2. 38.16 (title) of the statutes is amended to read:
AB1,3,6 638.16 (title) District tax levy; revenue limit; property tax relief aid.
AB1,3 7Section 3. 38.16 (3) (a) 1m. of the statutes is created to read:
AB1,4,2
138.16 (3) (a) 1m. "Equalized value" excludes the value of tax incremental
2districts.
AB1,4 3Section 4. 38.16 (3) (a) 2. of the statutes, as affected by 2013 Wisconsin Act 20,
4is amended to read:
AB1,4,65 38.16 (3) (a) 2. "Excess levy revenue" means the amount by which a district
6board's tax levy revenue exceeds the limit under this subsection.
AB1,5 7Section 5. 38.16 (3) (a) 2w. of the statutes is created to read:
AB1,4,98 38.16 (3) (a) 2w. "Revenue" means the sum of the tax levy and property tax
9relief aid under sub. (4).
AB1,6 10Section 6. 38.16 (3) (b) of the statutes is repealed.
AB1,7 11Section 7. 38.16 (3) (be) of the statutes, as created by 2013 Wisconsin Act 20,
12is amended to read:
AB1,4,1613 38.16 (3) (be) Notwithstanding sub. (1), no district board may increase its tax
14levy
revenue in 2013 the 2014-15 school year or in any school year thereafter by a
15percentage that exceeds the district's valuation factor, except as provided in pars.
16(bg) and (br).
AB1,8 17Section 8. 38.16 (3) (bg) 2. of the statutes, as created by 2013 Wisconsin Act
1820
, is amended to read:
AB1,5,219 38.16 (3) (bg) 2. If a district board's allowable levy revenue under this
20subsection in 2013 the 2014-15 school year, or any school year thereafter, is greater
21than its actual levy revenue in that school year, the limit otherwise applicable to the
22district board under this subsection in the succeeding school year is increased by the
23difference between the prior school year's allowable levy revenue and the prior school
24year's actual levy revenue, as determined by the department of revenue, up to a

1maximum increase of 0.5 percent of the actual levy revenue in that prior school year,
2if the district board approves the increase by a three-fourths vote.
AB1,9 3Section 9. 38.16 (3) (br) 1. of the statutes, as affected by 2013 Wisconsin Act
420
, is amended to read:
AB1,5,175 38.16 (3) (br) 1. If a district board wishes to exceed the limit otherwise
6applicable to the district under this subsection, it shall adopt a resolution supporting
7inclusion in the final district budget of an amount equal to the proposed excess levy
8revenue. The resolution shall be filed as provided in s. 8.37. Within 10 days after
9adopting the resolution, the district board shall notify the board of the scheduled date
10of the referendum and submit a copy of the resolution to the board. The district board
11shall call a special referendum for the purpose of submitting the resolution to the
12electors of the district for approval or rejection. In lieu of a special referendum, the
13district board may specify that the referendum be held at the next succeeding spring
14primary or election or partisan primary or general election, if such election is to be
15held not sooner than 70 days after the filing of the resolution of the district board.
16The district board shall certify the results of the referendum to the board within 10
17days after the referendum is held.
AB1,10 18Section 10. 38.16 (3) (br) 2. of the statutes is amended to read:
AB1,5,2319 38.16 (3) (br) 2. The district board shall publish type A, B, C, D, and E notices
20of the referendum under s. 10.01 (2). Notwithstanding s. 10.01 (2) (a), the type A
21notice shall include a statement of the amount of the excess levy revenue specified
22in subd. 1. and a copy of the resolution under subd. 1. Section 5.01 (1) applies in the
23event of failure to comply with the notice requirements of this subdivision.
AB1,11 24Section 11. 38.16 (3) (c) (intro.) of the statutes, as affected by 2013 Wisconsin
25Act 20
, is amended to read:
AB1,6,3
138.16 (3) (c) (intro.) Except as provided in par. (d), if the board determines that
2a district board imposed an excess levy exceeded its limit under this subsection, the
3board shall do all of the following:
AB1,12 4Section 12. 38.16 (3) (c) 1. of the statutes is amended to read:
AB1,6,75 38.16 (3) (c) 1. Reduce the amount of state aid payments to the district board
6in the school year in which the district board imposed the excess levy exceeded its
7limit
by an amount equal to the amount of the excess levy revenue.
AB1,13 8Section 13. 38.16 (3) (c) 3. of the statutes, as affected by 2013 Wisconsin Act
920
, is amended to read:
AB1,6,1210 38.16 (3) (c) 3. Ensure that the amount of the excess levy revenue is not
11included in determining the limit under this subsection for the district board for the
12following year.
AB1,14 13Section 14. 38.16 (3) (c) 4. of the statutes is amended to read:
AB1,6,1714 38.16 (3) (c) 4. Ensure that, if a district board's excess levy revenue exceeds the
15amount of state aid that may be reduced under subd. 1., the excess amount is
16subtracted from state aid payments in the following years until the total amount of
17the excess levy revenue is subtracted from the state aid payments.
AB1,15 18Section 15. 38.16 (3) (d) of the statutes is amended to read:
AB1,6,2219 38.16 (3) (d) The department may issue a finding that a district board is not
20liable for a penalty that would otherwise be imposed under par. (c) if the department
21determines that the district board's excess levy revenue is caused by one of the
22following clerical errors:
AB1,7,223 1. The department, through mistake or inadvertence, has assessed to any
24county or taxation district, in the current year or in the previous year, a greater or

1lesser valuation for any year than should have been assessed, causing the district
2board's levy to be erroneous in a way that directly causes an excess levy revenue.
AB1,7,53 2. A taxation district clerk or a county clerk, through mistake or inadvertence
4in preparing or delivering the tax roll, causes a district board's levy to be erroneous
5in a way that directly causes an excess levy revenue.
AB1,16 6Section 16. 38.16 (4) of the statutes is created to read:
AB1,7,97 38.16 (4) On February 20, 2015, and annually thereafter on the 3rd Friday in
8February, the board shall distribute to each district board, from the appropriation
9under s. 20.292 (1) (dp), the amount determined as follows:
AB1,7,1210 (a) For the payment in 2015, divide the district's equalized value as of January
111, 2014, by the total equalized value of all districts as of January 1, 2014, and
12multiply the quotient by $406,000,000.
AB1,7,1413 (b) For the payment in 2016 and annually thereafter, the amount determined
14under par. (a).
AB1,17 15Section 17. 71.05 (6) (b) 47. am. of the statutes, as affected by 2013 Wisconsin
16Act 20
, is amended to read:
AB1,7,2517 71.05 (6) (b) 47. am. For taxable years beginning after December 31, 2010, and
18before January 1, 2014, for 2 consecutive taxable years beginning with the taxable
19year in which the claimant's business locates to this state from another state or
20another country and begins doing business in this state, as defined in s. 71.22 (1r),
21and subject to the limitations provided under subd. 47. d., dm., and e., the profit or
22loss from a trade or business as reported on federal income tax return schedules C
23and F or their equivalents, plus ordinary gain or loss on the sale of business assets,
24as determined under s. 71.01 (6), but not less than zero, multiplied by the
25apportionment fraction determined in s. 71.04 (4) and subject to s. 71.04 (7).
AB1,18
1Section 18. 71.05 (6) (b) 47. b. of the statutes, as affected by 2013 Wisconsin
2Act 20
, is amended to read:
AB1,8,233 71.05 (6) (b) 47. b. With respect to partners and members of limited liability
4companies, for taxable years beginning after December 31, 2010, and before January
51, 2014, for 2 consecutive taxable years beginning with the taxable year in which the
6partnership's or limited liability company's business locates to this state from
7another state or another country and begins doing business in this state, as defined
8in s. 71.22 (1r), and subject to the limitations provided under subd. 47. d., dm., and
9e., the partner's or member's distributive share of taxable income as calculated under
10section 703 of the Internal Revenue Code; plus the items of income and gain under
11section 702 of the Internal Revenue Code, including taxable state and municipal
12bond interest and excluding nontaxable interest income or dividend income from
13federal government obligations; minus the items of loss and deduction under section
14756702 702 of the Internal Revenue Code, except items that are not deductible under
15s. 71.21; plus guaranteed payments to partners under section 707 (c) of the Internal
16Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL),
17(2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t),
18(3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5r), (5rm), and (8r); and plus or minus, as
19appropriate, transitional adjustments, depreciation differences, and basis
20differences under s. 71.05 (13), (15), (16), (17), and (19), multiplied by the
21apportionment fraction determined in s. 71.04 (4) and subject to s. 71.04 (7) or by
22separate accounting. No amounts subtracted under this subd. 47. b. may be included
23in the modification under par. (b) 9. or 9m.
AB1,19 24Section 19. 71.05 (6) (b) 47. c. of the statutes, as affected by 2013 Wisconsin
25Act 20
, is amended to read:
AB1,9,11
171.05 (6) (b) 47. c. With respect to shareholders of a tax-option corporation, for
2taxable years beginning after December 31, 2010, and before January 1, 2014, for 2
3consecutive taxable years beginning with the taxable year in which the tax-option
4corporation's business locates to this state from another state or another country and
5begins doing business in this state, as defined in s. 71.22 (1r), and subject to the
6limitations provided under subd. 47. d., dm., and e., the shareholder's distributive
7share of the entity's net income or loss as determined under this chapter, including
8interest income from federal, state, and municipal government obligations,
9multiplied by the apportionment fraction determined in s. 71.25 (6m) and subject to
10s. 71.25 (9) or by separate accounting. No amounts subtracted under this subdivision
11may be included in the modification under par. (b) 9. or 9m.
AB1,20 12Section 20. 71.05 (6) (b) 47. dm. of the statutes is created to read:
AB1,9,1713 71.05 (6) (b) 47. dm. No person may claim a deduction under this subdivision
14for taxable years beginning after December 31, 2013, except that a claimant who is
15first eligible to claim a deduction under this subdivision for a taxable year beginning
16after December 31, 2012, and before January 1, 2014, may claim the deduction the
17following taxable year.
AB1,21 18Section 21. 71.05 (8) (b) of the statutes, as affected by 2013 Wisconsin Act 20,
19is renumbered 71.05 (8) (b) 1.
AB1,22 20Section 22. 71.05 (8) (b) 2. of the statutes is created to read:
AB1,9,2421 71.05 (8) (b) 2. The taxpayer need not make the offset against Wisconsin
22modified taxable income of the 2 years preceding the loss, as provided under subd.
231., if the taxpayer chooses not to carry back the net operating loss to the 2 years
24preceding the loss.
AB1,23 25Section 23. 71.05 (8) (c) of the statutes is created to read:
AB1,10,2
171.05 (8) (c) The department shall not pay interest on any overpayment that
2results from the carry-back of a net operating loss.
AB1,24 3Section 24. 71.06 (1q) (a) of the statutes, as created by 2013 Wisconsin Act 20,
4is amended to read:
AB1,10,65 71.06 (1q) (a) On all taxable income from $0 to $7,500, 4.40 percent, except that
6for taxable years beginning after December 31, 2013, 4.0 percent
.
AB1,25 7Section 25. 71.06 (2) (i) 1. of the statutes, as created by 2013 Wisconsin Act
820
, is amended to read:
AB1,10,109 71.06 (2) (i) 1. On all taxable income from $0 to $10,000, 4.40 percent, except
10that for taxable years beginning after December 31, 2013, 4.0 percent
.
AB1,26 11Section 26. 71.06 (2) (j) 1. of the statutes, as created by 2013 Wisconsin Act
1220
, is amended to read:
AB1,10,1413 71.06 (2) (j) 1. On all taxable income from $0 to $5,000, 4.40 percent, except that
14for taxable years beginning after December 31, 2013, 4.0 percent
.
AB1,27 15Section 27. 71.07 (4k) (b) 1. of the statutes, as created by 2013 Wisconsin Act
1620
, is amended to read:
AB1,11,1117 71.07 (4k) (b) 1. Subject to the limitations provided in this subsection, and
18except as provided in subds. 2. and 3., for taxable years beginning after December
1931, 2012, an individual, a partner of a partnership, a shareholder of a tax-option
20corporation, or a member of a limited liability company may claim a credit against
21the tax imposed under s. 71.02 or 71.08, as allocated under par. (d), an amount equal
22to 5 percent of the amount obtained by subtracting from the individual's,
23partnership's, tax-option corporation's, or limited liability company's qualified
24research expenses, as defined in section 41 of the Internal Revenue Code, except that
25"qualified research expenses" includes only expenses incurred by the individual,

1partnership, tax-option corporation, or the limited liability company, incurred for
2research conducted in this state for the taxable year, except that a taxpayer may elect
3the alternative computation under section 41 (c) (4) of the Internal Revenue Code
4and that election applies until the department permits its revocation, except as
5provided in par. (c), and except that "qualified research expenses" does not include
6compensation used in computing the credit under subs. (2dj) and (2dx), the entity's
7base amount, as defined in section 41 (c) of the Internal Revenue Code, except that
8gross receipts used in calculating the base amount means gross receipts from sales
9attributable to Wisconsin under ss. 71.04 (7) (b) 1. and 2., (df), (dh), (dj), and (dk).
10Section 41 (h) of the Internal Revenue Code does not apply to the credit under this
11subdivision.
AB1,28 12Section 28. 71.07 (5i) (c) 3. of the statutes is created to read:
AB1,11,1413 71.07 (5i) (c) 3. No credit may be claimed under this subsection based on an
14amount paid under par. (b) after December 31, 2013.
AB1,29 15Section 29. 71.07 (5m) (a) 4. of the statutes is amended to read:
AB1,11,1716 71.07 (5m) (a) 4. "Net tax liability" means a claimant's income tax liability after
17he or she completes the computations listed in s. 71.10 (4) (a) to (dr) (d).
AB1,30 18Section 30. 71.07 (5n) (b) (intro.) of the statutes is amended to read:
AB1,11,2319 71.07 (5n) (b) Filing claims. (intro.) Subject to the limitations provided in this
20subsection, a claimant may claim as a credit against the tax imposed under s. ss.
2171.02 and 71.08, up to the amount of the tax, an amount equal to one of the following
22percentages of the claimant's eligible qualified production activities income in the
23taxable year:
AB1,31 24Section 31. 71.07 (9r) (a) of the statutes is amended to read:
AB1,12,10
171.07 (9r) (a) For taxable years beginning on or after August 1, 1988, any
2natural person may credit against taxes otherwise due under s. 71.02 or 71.08 an
3amount equal to 25% of the costs of preservation or rehabilitation of historic property
4located in this state, including architectural fees and costs incurred in preparing
5nomination forms for listing in the national register of historic places in Wisconsin
6or the state register of historic places, if the nomination is made within 5 years prior
7to submission of a preservation or rehabilitation plan under par. (b) 3. b., and if the
8physical work of construction or destruction in preparation for construction begins
9after December 31, 1988, except that the credit may not exceed $10,000, or $5,000
10for married persons filing separately, for any preservation or rehabilitation project.
AB1,32 11Section 32 . 71.08 (1) (intro.) of the statutes, as affected by 2013 Wisconsin Act
1262
, is amended to read:
AB1,12,2213 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
14couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
15ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (3m), (3n), (3p),
16(3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (5n), (6), (6e),
17(8r), (9e), and (9m), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3),
18(3n), (3t), and (3w), 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3),
19(3n), (3t), and (3w), 71.57 to 71.61, and 71.613 and subch. VIII and payments to other
20states under s. 71.07 (7), is less than the tax under this section, there is imposed on
21that natural person, married couple filing jointly, trust or estate, instead of the tax
22under s. 71.02, an alternative minimum tax computed as follows:
AB1,33 23Section 33 . 71.08 (1) (intro.) of the statutes, as affected by 2013 Wisconsin Acts
2462
and .... (this act), is amended to read:
AB1,13,10
171.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
2couple filing jointly, trust, or estate under s. 71.02, not considering the credits under
3ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (3m), (3n), (3p),
4(3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (4k), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (5n), (6),
5(6e), (8r), (9e), and (9m), and (9r), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx),
6(1dy), (2m), (3), (3n), (3t), and (3w), 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx),
7(1dy), (2m), (3), (3n), (3t), and (3w), 71.57 to 71.61, and 71.613 and subch. VIII and
8payments to other states under s. 71.07 (7), is less than the tax under this section,
9there is imposed on that natural person, married couple filing jointly, trust or estate,
10instead of the tax under s. 71.02, an alternative minimum tax computed as follows:
AB1,34 11Section 34. 71.10 (4) (cr) of the statutes is renumbered 71.10 (4) (fn).
AB1,35 12Section 35. 71.10 (4) (dr) of the statutes is renumbered 71.10 (4) (fp).
AB1,36 13Section 36. 71.10 (4) (er) of the statutes, as created by 2013 Wisconsin Act 20,
14is renumbered 71.10 (4) (fr).
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