SB673: Bill Text

1995 - 1996 LEGISLATURE

1995 Senate BILL 673

March 28, 1996 - Introduced by Senators Panzer, Rude and Jauch, cosponsored by Representatives F. Lasee, Huebsch and Jensen. Referred to Joint committee on Finance.

SB673,2,2 An Act to repeal 76.001, 76.02 (9r), 76.07 (4g) (e), 76.38 and 76.38 (4) (b); to renumber 76.02 (9t); to renumber and amend 76.02 (9u) and 76.38 (4) (a); to amend 20.913 (1) (b), 71.26 (3) (f), 73.01 (4) (a), 73.01 (5) (a), 76.01, 76.02 (9), 76.04 (1), 76.07 (1), 76.07 (2), 76.13 (1), subchapter II (title) of chapter 76 [precedes 76.38], 76.38 (1) (c), 77.52 (2) (a) 5., 134.72 (1) (a), 227.03 (1) and 968.01 (1); to repeal and recreate 20.913 (1) (b), 71.26 (3) (f), 73.01 (4) (a), 73.01 (5) (a), 76.28 (4), 76.28 (5), 76.28 (6) and 227.03 (1); to create 20.566 (2) (ht), subchapter IV of chapter 76 [precedes 76.80] and subchapter V of chapter 76 [precedes 76.90] of the statutes; and to affect 1991 Wisconsin Act 39, section 9149 (6), 1991 Wisconsin Act 39, section 9149 (7) and 1995 Wisconsin Act .... (Assembly Bill 808), section 3 (1); relating to: the taxation of telephone companies, imposing the sales tax on coin-operated telephone services, transfer of moneys from the general fund to the property tax relief fund and an expression of legislative intent concerning appropriations for the 1997-99 fiscal biennium.

Analysis by the Legislative Reference Bureau

Under current law, telephone companies pay a license fee based on their gross receipts at a rate of 5.70% and, beginning in 1997, interexchange carriers and resellers will pay a tax based on the value of their property in this state.

Under this bill, the license fee based on gross receipts is in effect for 1996 and 1997, and the correction of the estimated payments made in 1997 will be made with payments of the new taxes in 1998. The rate is 5.77%. Beginning in 1998, all telephone companies will pay a tax that is based on the value of their property. The department of revenue will administer the tax; the tax will not be collected as part of the property tax process. The tax base is all real property and all tangible personal property, rather than a base that is calculated by apportioning the value of the company's property to this state under a formula. The rate for each description of real property and each item of tangible personal property is the rate that would apply if the property were subject to general property taxes, rather than the statewide average net rate for manufacturing and commercial property, except that for 2 years certain telephone companies may file a combined report on their tangible personal property and pay the tax on it at a weighted rate.

For 1999 and 2000 cellular companies and local exchange carriers will pay a transitional adjustment fee equal to the gross receipts tax that they would have paid under current law minus their payments of the new tax based on the value of their property.

The bill transfers $35,000,000 to the property tax relief fund and expresses an intent to appropriate $10,000,000 for grants made by the educational technology board.

The bill also discontinues the sales tax exemption for services provided by coin-operated telephones.

This bill will be referred to the joint survey committee on tax exemptions for a detailed analysis, which will be printed as an appendix to this 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:

SB673, s. 1 Section 1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

SB673, s. 2 Section 2. 20.566 (2) (ht) of the statutes is created to read:

SB673,3,5 20.566 (2) (ht) Telephone tax administration. The amounts in the schedule for the administration of the tax under subch. IV of ch. 76. Beginning in 1997-98 the amounts determined under s. 76.84 (3) shall be credited to this appropriation account.

SB673, s. 3 Section 3. 20.913 (1) (b) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

SB673,3,11 20.913 (1) (b) Excess tax payments. Taxes collected in excess of lawful taxation, when claims therefor have been established as provided in ss. 71.30 (4), 71.74 (13), 71.75, 71.89 (1), 72.24, 74.35, 74.37, 76.13 (3), 76.38, 76.39, 76.84, 76.91, 78.19, 78.20, 78.68 (10), 78.75, 78.80 (1m), 139.092, 139.25 (1), 139.36, 139.365 and 139.39 (4).

SB673, s. 4 Section 4. 20.913 (1) (b) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

SB673,3,17 20.913 (1) (b) Excess tax payments. Taxes collected in excess of lawful taxation, when claims therefor have been established as provided in ss. 71.30 (4), 71.74 (13), 71.75, 71.89 (1), 72.24, 74.35, 74.37, 76.13 (3), 76.39, 76.84, 76.91, 78.19, 78.20, 78.68 (10), 78.75, 78.80 (1m), 139.092, 139.25 (1), 139.36, 139.365 and 139.39 (4).

SB673, s. 5 Section 5. 71.26 (3) (f) of the statutes is amended to read:

SB673,4,2 71.26 (3) (f) Section 164 (a) is modified so that foreign taxes are not deductible unless the income on which the tax is based is taxable under this chapter and so that gross receipts taxes assessed in lieu of property taxes, the license fees under ss. 76.28 and 76.38 and the tax taxes under s. ss. 70.375, 76.81 and 76.91 are deductible.

SB673, s. 6 Section 6. 71.26 (3) (f) of the statutes, as affected by 1995 Wisconsin Act .... (this act), is repealed and recreated to read:

SB673,4,8 71.26 (3) (f) Section 164 (a) is modified so that foreign taxes are not deductible unless the income on which the tax is based is taxable under this chapter and so that gross receipts taxes assessed in lieu of property taxes, the license fee under s. 76.28 and the taxes under ss. 70.375, 76.81 and 76.91 are deductible.

SB673, s. 7 Section 7. 73.01 (4) (a) of the statutes is amended to read:

SB673,4,25 73.01 (4) (a) Subject to the provisions for judicial review contained in s. 73.015, the commission shall be the final authority for the hearing and determination of all questions of law and fact arising under sub. (5) and s. 72.86 (4), 1985 stats., and ss. 70.11 (21), 70.38 (4) (a), 70.397, 70.64, 70.995 (8), 76.38 (12) (a), 76.39 (4) (c), 76.48 (6), 76.91, 77.26 (3), 77.59 (6) (b), 78.01, 78.22, 78.40, 78.555, 139.02, 139.03, 139.06, 139.31, 139.315, 139.33, 139.76 and 139.78, subch. XIV of ch. 71 and subch. VII of ch. 77. Whenever with respect to a pending appeal there is filed with the commission a stipulation signed by the department of revenue and the adverse party, under s. 73.03 (25), agreeing to an affirmance, modification or reversal of the department's position with respect to some or all of the issues raised in the appeal, the commission shall enter an order affirming or modifying in whole or in part, or canceling the assessment appealed from, or allowing in whole or in part or denying the petitioner's refund claim, as the case may be, pursuant to and in accordance with the stipulation filed. No responsibility shall devolve upon the commission, respecting the signing of an order of dismissal as to any pending appeal settled by the department without the approval of the commission.

SB673, s. 8 Section 8. 73.01 (4) (a) of the statutes, as affected by 1995 Wisconsin Act .... (this act), is repealed and recreated to read:

SB673,5,18 73.01 (4) (a) Subject to the provisions for judicial review contained in s. 73.015, the commission shall be the final authority for the hearing and determination of all questions of law and fact arising under sub. (5) and s. 72.86 (4), 1985 stats., and ss. 70.11 (21), 70.38 (4) (a), 70.397, 70.64 and 70.995 (8), s. 76.38 (12) (a), 1993 stats., ss. 76.39 (4) (c), 76.48 (6), 76.91, 77.26 (3), 77.59 (6) (b), 78.01, 78.22, 78.40, 78.555, 139.02, 139.03, 139.06, 139.31, 139.315, 139.33, 139.76 and 139.78, subch. XIV of ch. 71 and subch. VII of ch. 77. Whenever with respect to a pending appeal there is filed with the commission a stipulation signed by the department of revenue and the adverse party, under s. 73.03 (25), agreeing to an affirmance, modification or reversal of the department's position with respect to some or all of the issues raised in the appeal, the commission shall enter an order affirming or modifying in whole or in part, or canceling the assessment appealed from, or allowing in whole or in part or denying the petitioner's refund claim, as the case may be, pursuant to and in accordance with the stipulation filed. No responsibility shall devolve upon the commission, respecting the signing of an order of dismissal as to any pending appeal settled by the department without the approval of the commission.

SB673, s. 9 Section 9. 73.01 (5) (a) of the statutes is amended to read:

SB673,6,23 73.01 (5) (a) Any person who is aggrieved by a determination of the state board of assessors under s. 70.995 (8) or by the department of revenue under s. 70.11 (21) or who has filed a petition for redetermination with the department of revenue and who is aggrieved by the redetermination of the department may, within 60 days of the determination of the state board of assessors or of the department or, in all other cases, within 60 days after the redetermination but not thereafter, file with the clerk of the commission a petition for review of the action of the department and the number of copies of the petition required by rule adopted by the commission. If a municipality appeals, its appeal shall set forth that the appeal has been authorized by an order or resolution of its governing body and the appeal shall be verified by a member of that governing body as pleadings in courts of record are verified. The clerk of the commission shall transmit one copy to the department of revenue and to each party. In the case of appeals from manufacturing property assessments, the person assessed shall be a party to a proceeding initiated by a municipality. At the time of filing the petition, the petitioner shall pay to the commission a $5 filing fee, which the commission shall deposit in the general fund. Within 30 days after such transmission the department, except for petitions objecting to manufacturing property assessments, shall file with the clerk of the commission an original and the number of copies of an answer to the petition required by rule adopted by the commission and shall serve one copy on the petitioner or the petitioner's attorney or agent. Within 30 days after service of the answer, the petitioner may file and serve a reply in the same manner as the petition is filed. Any person entitled to be heard by the commission under s. 76.38 (12) (a), 76.39 (4) (c) or , 76.48 or 76.91 may file a petition with the commission within the time and in the manner provided for the filing of petitions in income or franchise tax cases. Such papers may be served as a circuit court summons is served or by certified mail. For the purposes of this subsection, a petition for review is considered timely filed if mailed by certified mail in a properly addressed envelope, with postage duly prepaid, which envelope is postmarked before midnight of the last day for filing.

SB673, s. 10 Section 10. 73.01 (5) (a) of the statutes, as affected by 1995 Wisconsin Act .... (this act), is repealed and recreated to read:

SB673,8,4 73.01 (5) (a) Any person who is aggrieved by a determination of the state board of assessors under s. 70.995 (8) or by the department of revenue under s. 70.11 (21) or who has filed a petition for redetermination with the department of revenue and who is aggrieved by the redetermination of the department may, within 60 days of the determination of the state board of assessors or of the department or, in all other cases, within 60 days after the redetermination but not thereafter, file with the clerk of the commission a petition for review of the action of the department and the number of copies of the petition required by rule adopted by the commission. If a municipality appeals, its appeal shall set forth that the appeal has been authorized by an order or resolution of its governing body and the appeal shall be verified by a member of that governing body as pleadings in courts of record are verified. The clerk of the commission shall transmit one copy to the department of revenue and to each party. In the case of appeals from manufacturing property assessments, the person assessed shall be a party to a proceeding initiated by a municipality. At the time of filing the petition, the petitioner shall pay to the commission a $5 filing fee, which the commission shall deposit in the general fund. Within 30 days after such transmission the department, except for petitions objecting to manufacturing property assessments, shall file with the clerk of the commission an original and the number of copies of an answer to the petition required by rule adopted by the commission and shall serve one copy on the petitioner or the petitioner's attorney or agent. Within 30 days after service of the answer, the petitioner may file and serve a reply in the same manner as the petition is filed. Any person entitled to be heard by the commission under s. 76.38 (12) (a), 1993 stats., or s. 76.39 (4) (c), 76.48 or 76.91 may file a petition with the commission within the time and in the manner provided for the filing of petitions in income or franchise tax cases. Such papers may be served as a circuit court summons is served or by certified mail. For the purposes of this subsection, a petition for review is considered timely filed if mailed by certified mail in a properly addressed envelope, with postage duly prepaid, which envelope is postmarked before midnight of the last day for filing.

SB673, s. 11 Section 11. 76.001 of the statutes is repealed.

SB673, s. 12 Section 12. 76.01 of the statutes is amended to read:

SB673,8,12 76.01 Railroads and utilities, assessment. The department of revenue shall make an annual assessment of the property of all railroad companies, of all conservation and regulation companies, of all sleeping car companies, of all air carriers, of all telephone companies and of all pipeline companies, within this state, for the purpose of levying and collecting taxes thereon, as provided in this subchapter.

SB673, s. 13 Section 13. 76.02 (9) of the statutes is amended to read:

SB673,8,17 76.02 (9) "Company", without other designation or qualification, includes any railroad company, any conservation and regulation company, any express company, any air carrier company, any pipeline company, any telephone company and any sleeping car company, as defined in this section, to which "company" is applied.

SB673, s. 14 Section 14. 76.02 (9r) of the statutes is repealed.

SB673, s. 15 Section 15. 76.02 (9t) of the statutes is renumbered 76.80 (3).

SB673, s. 16 Section 16. 76.02 (9u) of the statutes is renumbered 76.80 (4) and amended to read:

SB673,9,5 76.80 (4) "Telephone company" means any person that provides to another person telecommunications services, including the resale of services provided by another telephone company, that originate in one local access and transport area, as defined in s. 76.38 (1) (bd), and terminate in a different local access and transport area, as defined in s. 76.38 (1) (bd). "Telephone company" does not include a person who operates a private shared telecommunications system, as defined in s. 196.201 (1), and who is not otherwise a telephone company. "Telephone company" does not include a person who is a cellular mobile radio telecommunications utility, as defined in s. 196.202 (1).

SB673, s. 17 Section 17. 76.04 (1) of the statutes is amended to read:

SB673,9,12 76.04 (1) Every company defined in s. 76.02 shall, annually, file a true and accurate statement in such manner and form and setting forth such facts as the department shall deem necessary to enforce ss. 76.01 to 76.26. The annual reports for railroad companies, sleeping car companies and express companies shall be filed on or before April 15 and for conservation and regulation companies, air carriers, telephone companies and pipeline companies on or before May 1.

SB673,9,21 (1m) For sufficient reason shown the department may upon written request allow such further time for making and filing the report under sub. (1) as it may deem necessary, but not to exceed 30 days. If any company fails to file such report within the time prescribed or as extended under this subsection, the department shall add to the taxes due from such company $250 if the report is not filed within 15 days after the due date or extended due date and an additional $250 for each month or part of a month thereafter during which the report is not filed, except that the total penalty may not exceed $2,500. No company may in any action or proceeding contest the imposition of such penalty.

SB673, s. 18 Section 18. 76.07 (1) of the statutes is amended to read:

SB673,9,25 76.07 (1) Duty of department. The department on or before August 1 in each year in the case of railroad companies and sleeping car companies, and on or before September 15 in the case of air carrier companies, telephone companies, conservation and regulation companies and pipeline companies, shall, according to its best knowledge and judgment, ascertain and determine the full market value of the property of each company within the state.

SB673, s. 19 Section 19. 76.07 (2) of the statutes is amended to read:

SB673,10,24 76.07 (2) Relation to state valuation; description. The value of the property of each of said companies for assessment shall be made on the same basis and for the same period of time, as near as may be, as the value of the general property of the state is ascertained and determined. The department shall prepare an assessment roll and place thereon after the name of each of said companies assessed, the following general description of the property of such company, to wit: "Real estate, right-of-way, tracks, stations, terminals, appurtenances, rolling stock, equipment, franchises and all other real estate and personal property of said company," in the case of railroads, and "Real estate, right-of-way, poles, wires, conduits, cables, devices, appliances, instruments, franchises and all other real and personal property of said company," in the case of conservation and regulation companies, and "Real estate, appurtenances, rolling stock, equipment, franchises, and all other real estate and personal property of said company," in the case of sleeping car and air carrier companies, and "Land and land rights, structures, improvements, mains, pumping and regulation equipment, services, appliances, instruments, franchises and all other real and personal property of said company," in the case of pipeline companies, and "All property of the company used in the operation of the company's telephone business" in the case of telephone companies, which description shall be deemed and held to include the entire property and franchises of the company specified and all title and interest therein.

SB673, s. 20 Section 20. 76.07 (4g) (e) of the statutes is repealed.

SB673, s. 21 Section 21. 76.13 (1) of the statutes is amended to read:

SB673,11,11 76.13 (1) The department shall compute and levy a tax upon the property of each company defined in s. 76.02, as assessed in the manner specified in ss. 76.07 and 76.08, at the average net rate of taxation determined under s. 76.126. The amount of tax to be paid by each such company shall be extended upon a tax roll opposite the description of the property of the respective companies. The tax rolls for all companies required to be assessed on or before August 1 in each year under s. 76.07 (1) shall be completed on or before August 10, and for all companies required to be assessed on or before September 15 in each year under s. 76.07 (1) shall be completed on or before October 1; and the department shall thereupon attach to each such roll a certificate signed by the secretary of revenue, which shall be as follows:

SB673,11,19 "I hereby certify that the foregoing tax roll includes the property of all railroad companies, sleeping car companies, air carrier companies, conservation and regulation companies, telephone companies or pipeline companies, as the case may be, defined in 76.0276, liable to taxation in this state; that the valuation of the property of each company as set down in said tax roll is the full market value thereof as assessed by the department of revenue, except as changed by court judgment, and that the taxes thereon charged in said tax roll have been assessed and levied at the average net rate of taxation in this state, as required by law".

SB673, s. 22 Section 22. 76.28 (4) of the statutes is repealed and recreated to read:

SB673,12,11 76.28 (4) Redetermination. If after filing the reports specified in sub. (7) and after the department's computation and assessment of license fees under sub. (2) it is determined that the amount of gross revenues reported is in error, the department shall compute the additional license fee to be paid or the amount of the overpayment of license fee to be refunded, as the case may be. If an additional license fee is due, the department shall give notice to the light, heat and power company against whom the license fee is to be levied. All such additional assessments and claims for refunds for excess license fees paid are subject to the same procedure for review and final determination as additional income or franchise tax assessments and claims for refunds under ch. 71 as far as the same may be applicable, except that appeals of denials of claims for refunds shall be made directly to the tax appeals commission and except that the additional license fees shall become delinquent 60 days after notice provided in this subsection or, if review proceedings are held, 60 days following final determination of the review proceedings. All additional license fees shall bear interest at the rate of 12% per year from the time they should have been paid to the date on which the additional fees shall become delinquent if unpaid.

SB673,12,20 (b) In the case of overpayments of license fees by any light, heat and power company under par. (a), the department shall certify the overpayments to the department of administration, which shall audit the amount of the overpayments and the state treasurer shall pay the amounts determined by means of the audit. All refunds of license fees under this subsection shall bear interest at the annual rate of 9% from the date of the original payment to the date when the refund is made. The time for making additional levies of license fees or claims for refunds of excess license fees paid, in respect to any year, shall be limited to 4 years after the time the report for such year was filed.

SB673, s. 23 Section 23. 76.28 (5) of the statutes is repealed and recreated to read:

SB673,13,3 76.28 (5) Remedies. Delinquent license fees of any light, heat and power company, together with penalties and interest, for a lien upon all property of such company prior to all other liens, claims and demands, which lien may be enforced in an action in the name of the state in any court of competent jurisdiction against the property of such company within the state as an entirety. The remedies for nonpayment of taxes specified in s. 76.14 apply to nonpayment of license fees, penalties and interest referred to under this section.

SB673, s. 24 Section 24. 76.28 (6) of the statutes is repealed and recreated to read:

SB673,13,7 76.28 (6) Administration. (a) The records, books, accounts and papers of any light, heat and power company are subject to inspection and examination by the secretary of revenue or by the person that the secretary designates for that purpose.

SB673,13,14 (b) If any light, heat and power company that is required under this section to file a report fails to file a report within the time prescribed by law or as extended under sub. (7), unless it is shown that the failure is due to reasonable cause and not due to wilful neglect, there shall be added to the amount required to be shown as license fees on the report 5% of the amount of such fees if the failure is for not more than one month, with an additional 5% for each additional month or fraction thereof during which the failure continues, not exceeding 25% in the aggregate.

SB673,13,23 (c) If any light, heat and power company fails to make a report as required by sub. (7) within the time required, the department may enter an assessment against such company in a sum representing the approximate amount of the license fees, together with penalties and interest, for which such company may be liable as estimated by the department. Notice of such assessment shall be given by certified mail, and unless a report conforming to the requirements of this section is filed within 15 days of such notice, such estimated assessment shall become final. Thereafter the light, heat and power company assessed shall be forever barred from questioning the correctness of the same in any action or proceeding.

SB673, s. 25 Section 25. Subchapter II (title) of chapter 76 [precedes 76.38] of the statutes is amended to read:

SB673,14,1 Chapter 76

SB673,14,2 Subchapter II

SB673,14,5 Telephone companies license fees; car line companies; electric cooperative associations

SB673, s. 26 Section 26. 76.38 of the statutes, as affected by 1995 Wisconsin Act .... (this act), is repealed.

SB673, s. 27 Section 27. 76.38 (1) (c) of the statutes is amended to read:

SB673,14,15 76.38 (1) (c) "Telephone company" means any person operating a telecommunications facility or providing telecommunications services to another person, including the resale of those services provided by another telephone company. "Telephone company" does not include any person who operates a private shared telecommunications system as defined in s. 196.201 (1) and who is not otherwise a telephone company. Beginning with the assessment on May 1, 1998, "telephone company" does not include a person described in s. 76.02 (9u).

SB673, s. 28 Section 28. 76.38 (4) (a) of the statutes, is renumbered 76.38 (4), and 76.38 (4) (intro.), (c) and (d) of the statutes, as renumbered, are amended to read:

SB673,14,21 76.38 (4) (intro.) Except as provided in sub. (6), every Every telephone company operating one or more telephone exchanges shall pay an annual license fee equal to the following percentages of its total gross revenues in this state for local and rural exchange service:

SB673,14,22 (c) For fees assessed on May 1, 1996, 5.70% 5.77%.

SB673,14,24 (d) For fees assessed on May 1, 1997, and on each May 1 thereafter, 5.40%, 1998, 5.77%.

SB673, s. 29 Section 29. 76.38 (4) (b) of the statutes is repealed.

SB673, s. 30 Section 30. Subchapter IV of chapter 76 [precedes 76.80] of the statutes is created to read:

SB673,15,3 Chapter 76

SB673,15,5 Subchapter IV Telephone company tax

SB673,15,6 76.80 Definitions. In this subchapter:

SB673,15,7 (1) "Department" means the department of revenue.

SB673,15,14 76.81 Imposition. There is imposed a tax on the real property of, and the tangible personal property of, every telephone company, except motor vehicles that are exempt under s. 70.112 (5) and treatment plant and pollution abatement equipment that is exempt under s. 70.11 (21) (a). Except as provided in s. 76.815, the rate for the tax imposed on each description of real property and on each item of tangible personal property is the net rate for the prior year for the tax under ch. 70 in the taxing jurisdictions where the description or item is located.

SB673,15,19 76.815 Combined reporting. For taxes payable in 1998 and 1999, telephone companies that have more than 150,000 access lines in this state may submit a combined report of their items of personal property. Any company that does so shall pay the tax on those items at a rate that reflects the company's weighted average property tax rate based on the value and location of its real property in this state.