AB172: Bill Text

LRB-1493/1

MES:wlj

2017 - 2018 LEGISLATURE

2017 Assembly BILL 172

March 20, 2017 - Introduced by Representatives Riemer, Anderson, Bowen, Crowley, Genrich, Goyke, Kolste, Sargent, Young and Zamarripa, cosponsored by Senator Johnson. Referred to Committee on Ways and Means.

AB172,1,6 An Act to amend 71.06 (1q) (intro.), 71.06 (2) (i) (intro.), 71.06 (2) (j) (intro.), 71.06 (2e) (a), 71.06 (2e) (b), 71.06 (2m), 71.06 (2s) (d), 71.125 (1), 71.125 (2), 71.17 (6), 71.64 (9) (b) (intro.), 71.67 (5) (a) and 71.67 (5m); and to create 71.06 (1r), 71.06 (2) (k), 71.06 (2) (L), 71.06 (2e) (bg), 71.07 (6i) and 71.10 (4) (cs) of the statutes; relating to: creating a nonrefundable individual income tax credit for certain taxpayers and a new top individual income tax bracket.

Analysis by the Legislative Reference Bureau

This bill creates a nonrefundable individual income tax credit for taxpayers with Wisconsin taxable income (WTI) below certain income thresholds. The credit phases out for taxpayers with WTI above these thresholds. Income thresholds and phase-out rates vary by filing status as follows:

1. For an individual who files as a single individual or head of household, the maximum credit amount is $200 if the claimant's WTI in the year to which the claim relates is less than $75,000. The maximum credit phases out from $200 to zero as the claimant's WTI increases from $75,000 to $112,500.

2. For a married couple that files a joint return, the maximum credit amount is $200 if the sum of the claimant's WTI and his or her spouse's WTI in the year to which the claim relates is less than $100,000. The maximum credit phases out from $200 to zero as the couple's household WTI increases from $100,000 to $150,000. For a married couple that files separately, the maximum credit amount is $100 if the claimant's WTI in the year to which the claim relates is less than $50,000. The maximum credit phases out from $100 to zero as the claimant's WTI increases from $50,000 to $75,000. Generally, both spouses of a married couple may claim the credit if they file separate returns.

Because the credit is nonrefundable, no refund is paid if the amount of the credit exceeds the taxpayer's tax liability. Part-year and nonresidents of this state may not claim the credit.

The bill also creates a fifth individual income tax bracket and a new tax rate for this bracket. For those who file as a single individual, fiduciary, or head of household, the new top rate is 8.88 percent on taxable income above $750,000. For married joint filers, the new 8.88 percent rate applies to taxable income above $1,000,000, and this new rate applies to married separate filers on taxable income above $500,000. As is the case under the current law brackets, the new bracket amounts are indexed for inflation.

The bill first applies to taxable years beginning on January 1, 2017.

For further information see the state 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:

AB172,1 Section 1. 71.06 (1q) (intro.) of the statutes is amended to read:

AB172,2,7 71.06 (1q) Fiduciaries, single individuals, and heads of households; after 2012 to 2016. (intro.) The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2012, and before January 1, 2017:

AB172,2 Section 2. 71.06 (1r) of the statutes is created to read:

AB172,2,13 71.06 (1r) Fiduciaries, single individuals, and heads of households; after 2016. The tax to be assessed, levied, and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2016:

AB172,3,1 (a) On all taxable income from $0 to $11,230, 4.0 percent.

AB172,3,3 (b) On all taxable income exceeding $11,230 but not exceeding $22,470, 5.84 percent.

AB172,3,5 (c) On all taxable income exceeding $22,470 but not exceeding $247,350, 6.27 percent.

AB172,3,7 (d) On all taxable income exceeding $247,350 but not exceeding $750,000, 7.65 percent.

AB172,3,8 (e) On all taxable income exceeding $750,000, 8.88 percent.

AB172,3 Section 3. 71.06 (2) (i) (intro.) of the statutes is amended to read:

AB172,3,11 71.06 (2) (i) (intro.) For joint returns, for taxable years beginning after December 31, 2012, and before January 1, 2017:

AB172,4 Section 4. 71.06 (2) (j) (intro.) of the statutes is amended to read:

AB172,3,14 71.06 (2) (j) (intro.) For married persons filing separately, for taxable years beginning after December 31, 2012, and before January 1, 2017:

AB172,5 Section 5. 71.06 (2) (k) of the statutes is created to read:

AB172,3,17 71.06 (2) (k) For joint returns, for taxable years beginning after December 31, 2016:

AB172,3,18 1. On all taxable income from $0 to $14,980, 4.0 percent.

AB172,3,20 2. On all taxable income exceeding $14,980 but not exceeding $29,960, 5.84 percent.

AB172,3,22 3. On all taxable income exceeding $29,960 but not exceeding $329,810, 6.27 percent.

AB172,3,24 4. On all taxable income exceeding $329,810 but not exceeding $1,000,000,7.65 percent.

AB172,3,25 5. On all taxable income exceeding $1,000,000, 8.88 percent.

AB172,6 Section 6. 71.06 (2) (L) of the statutes is created to read:

AB172,4,3 71.06 (2) (L) For married persons filing separately, for taxable years beginning after December 31, 2016:

AB172,4,4 1. On all taxable income from $0 to $7,490, 4.0 percent.

AB172,4,6 2. On all taxable income exceeding $7,490 but not exceeding $14,980, 5.84 percent.

AB172,4,8 3. On all taxable income exceeding $14,980 but not exceeding $164,900, 6.27 percent.

AB172,4,10 4. On all taxable income exceeding $164,900 but not exceeding $500,000, 7.65 percent.

AB172,4,11 5. On all taxable income exceeding $500,000, 8.88 percent.

AB172,7 Section 7. 71.06 (2e) (a) of the statutes is amended to read:

AB172,5,8 71.06 (2e) (a) For taxable years beginning after December 31, 1998, and before January 1, 2000, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1m) and (2) (c) and (d), and for taxable years beginning after December 31, 1999, and before January 1, 2017, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1n), (1p) (a) to (c), (1q) (a) and (b), and (2) (e), (f), (g) 1. to 3., (h) 1. to 3., (i) 1. and 2., and (j) 1. and 2., shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1997, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2000, and before January 1, 2002, the dollar amount in the top bracket under subs. (1p) (c) and (d), (2) (g) 3. and 4. and (h) 3. and 4. shall be increased by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1999, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2011, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year.

AB172,8 Section 8. 71.06 (2e) (b) of the statutes is amended to read:

AB172,5,21 71.06 (2e) (b) For taxable years beginning after December 31, 2009, and before January 1, 2017, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under subs. (1p) (d), (1q) (c), and (2) (g) 4., (h) 4., (i) 3., and (j) 3., and the dollar amount in the top bracket under subs. (1p) (e), (1q) (d), and (2) (g) 5., (h) 5., (i) 4., and (j) 4., shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 2008, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2011, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year.

AB172,9 Section 9. 71.06 (2e) (bg) of the statutes is created to read:

AB172,6,6 71.06 (2e) (bg) For taxable years beginning after December 31, 2016, the dollar amount in each tax bracket under subs. (1r) and (2) (k) and (L) shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 2015, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2017, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year.

AB172,10 Section 10. 71.06 (2m) of the statutes is amended to read: