7. Sales Tax on Prepaid Calling Cards
Sections 2387 and 9443 (13)
These sections apply the sales tax to prepaid calling cards at the point of sale. Phone calls made with these cards would be exempt from the Wisconsin sales tax.
I am vetoing this provision because these cards are similar to gift certificates, which are currently not taxed at the point of sale, and also because this provision would tax calls made with prepaid phone cards differently than calls made with credit cards. Also, additional amounts added to prepaid phone cards are likely to escape taxation, and there would be inequitable taxation in cases where cards were bought in states which don't impose a sales tax on them and then used in Wisconsin.
8. Sales Tax on University Food Contracts
Section 2393nq
This section modifies the current sales tax exemption for meals, food, food products and beverages furnished in accordance with any contract of an institution of higher education by providing that the exemption applies only if these items are furnished to a student enrolled for credit at that institution. In addition, this section provides that the sales tax exemption can not be used for purchases of meals by faculty members or continuing students. In the case of National Football League teams that have training camps at University of Wisconsin campuses, these provisions would first apply to any National Football League team purchasing these items under a contract entered into on or after January 1, 1998.
I am partially vetoing this section to delete the reference to January 1, 1998 because I believe Wisconsin should encourage NFL teams to train in Wisconsin. These teams bring significant tourism and economic development benefits to several areas of our state. I would like to note that implementation of this modification does not affect groups that are otherwise tax exempt such as some summer groups housed at the University for education and training.
9. Sales Tax Exemption for Internet Access
Section 2386j
This section provides that access to the Internet would not be subject to the sales and use tax. I am vetoing this section because it creates different tax treatment of similar communications services. Communications through e-mail, bulletin boards and Internet chat groups would be exempt, while telephone calls and other telecommunications would be taxable. I plan to examine all sales tax exemptions during the upcoming biennium and make recommendations to equalize our tax treatment.
10. Sales Tax on Timeshare Property
Sections 2383g, 2386q, 2393nv and 9443 (18n)
These sections exempt from the sales tax all flex-time timeshare sales and their associated charges. I am vetoing this provision because it would create a tax inequity. If this provision were to stand, fixed-time timeshare transactions would continue to be subject to the real estate transfer fee but flex-time timeshare transactions would be exempt from paying any sales tax or fees. This is inequitable since there are few, if any, physical differences between the two types of timeshares.
11. Sales Tax Exemption for Medicine Samples
Sections 2392no and 9443 (17t)
A358
These sections would create an exemption from the sales and use tax for medicines furnished without charge to a physician, surgeon, nurse, anesthetist, osteopath, dentist, podiatrist or optometrist if the medicine may not be dispensed without a prescription. I am vetoing this provision because I am not convinced that it would equalize tax treatment. I plan to examine all sales tax exemptions during the upcoming biennium and make recommendations to equalize our tax treatment.
12. Sales and Use Tax Agreements with Direct Marketers
Section 2363
This section would allow the Department of Revenue to enter into agreements with direct marketers regarding the collection of state and local sales and use taxes. Most out-of-state direct marketers have no legal obligation to collect state and local use taxes. This section further provides that the department may not implement any agreement with direct marketers if the agreement does not conform to state law. I am partially vetoing this section to remove the stipulation that the department not implement agreements that are not in conformance with state law because I believe it is too restrictive; the department should be allowed to work with other states to negotiate agreements that have incentives or administrative simplifications not specifically provided in Wisconsin law. Creating such a restriction could potentially cost Wisconsin millions of dollars in lost tax collections.
OFFICE OF THE COMMISSIONER OF RAILROADS
13. Office of the Commissioner of Railroads Staff
Section 169 [as it relates to s.
20.155 (2)(g)] provides $85,100 PR in fiscal year 1997-98 and $100,100 PR in fiscal year 1998-99 for 2.5 new positions for the Office of the Commissioner of Railroads, which is attached administratively to the Public Service Commission. These positions would include 2.0 FTE regulation compliance investigators and a 0.5 FTE program assistant. Although there is no language in the budget bill that authorizes the funding increase for these positions, the purpose of this funding was included in a Joint Committee on Finance budget motion.
I object to providing an increase of 2.5 FTE positions because this amount of new staff exceeds what the office needs to function efficiently and effectively. By lining out the Office of the Commissioner of Railroad's s.
20.155 (2) (g) appropriation and writing in a smaller amount that deletes $20,400 PR in fiscal year 1997-98 and $40,800 PR in fiscal year 1998-99, I am partially vetoing the part of the bill which funds these new staff. My veto deletes funding for 1.0 FTE position and instead provides funding for only 1.0 FTE regulation compliance investigator and a 0.5 FTE program assistant. I am also requesting the Department of Administration Secretary not to allot these funds and not to authorize the 1.0 FTE position.
REVENUE
14. Alcohol Beverage Regulation
Sections 2906gg, 2906mg, 2906mr and 9343 (1tu)
Sections 2906gg and 9343 (1tu) prohibit a municipality from enacting or enforcing any rule or ordinance that does not strictly conform to state statutes regulating the sale of alcohol beverages to an underage or intoxicated person, the presence of an underage person in a bar, and the possession of alcohol beverages by an underage person. I am vetoing these sections because I believe municipalities are better suited to determine the alcohol beverage ordinances that are appropriate for their communities.
In addition, sections 2906mg and 2906mr eliminate a citizen's right to file a complaint against a licensed seller of alcohol beverages alleging that the seller maintains an indecent or riotous house or has sold or given away alcohol beverages to known habitual drunkards. I am vetoing these sections to maintain a citizen's right to file such a complaint because I believe it is important for local communities and their citizens to have control over alcohol beverage regulation.
15. County Sales Tax Administrative Fee
Sections 717m, 2399f, 2399fm and 9443 (16n)
These sections reduce the portion of county sales tax collections retained by the Department of Revenue for its costs in administering the tax from 1.5% to 1.3% beginning July 1, 1999. I am vetoing these sections to retain the administrative fee at 1.5% because 1.3% of collections will be insufficient to cover all of the department's county sales tax costs. Beginning in fiscal year 1998-99, the department expects to begin redesigning its sales tax systems. Since the county sales tax constitutes major portions of these systems and since counties will benefit from the simplified forms and faster distributions that the redesigned system will allow, it is appropriate that counties pay a share of the redesign costs. If the amount of county sales tax collections retained by the department is inadequate, the pace of the redesign may be hindered and the state's general fund may be forced to absorb an unfair share of the costs.
16. Premier Resort Area Tax Administrative Fee
Sections 700mm, 719c and 2410m
A359
These sections establish the portion of premier resort area tax collections that the Department of Revenue will retain for its expenses in administering this new local option tax. Specifically, these sections provide the department with 3% of the premier resort area tax collections for sales subject to the tax before January 1, 2000 and 1.3% of collections thereafter. I am partially vetoing these sections to provide the department with 3% of collections into the future because 1.3% will be insufficient to cover the agency's costs. Only a few municipalities will likely impose the premier resort area tax. Consequently, it will not have the administrative economies of scale that allowed the county sales tax fee to be reduced below its initial level of 3%. Furthermore, since it is not known when eligible municipalities will adopt the tax, it is uncertain how long the department will receive 3% of collections. At some later date, however, the fee may be reduced if actual experience with collecting the tax demonstrates that a lower fee is feasible.
17. Report on Alternative Methods of Filing
Section 9143 (2m)
This section requires the Department of Revenue to identify potential savings from implementing alternative methods of filing and paying taxes and to submit a report listing those savings to the Joint Committee on Finance at its first quarterly meeting in 1998 under s.
13.10. I am vetoing this section because a report on this topic so shortly after this budget is signed will not yield any significant information. This budget already reduces the department's budget for savings expected to be realized by the implementation of electronic funds transfers for certain tax filers. Since the department has no plans for further electronic filings at this time, this reporting requirement is premature.
18. Property Assessment Manual on CD-ROM
Section 2355m
This section includes a provision requiring the Department of Revenue to produce the property assessment manual on CD-ROM if the department determines that there is sufficient demand for this format. I am vetoing this provision because it is unnecessary. The department already has sufficient authority to use new technologies to provide information. Furthermore, given the pace of technological change, it is inappropriate to make consideration of one format an ongoing statutory requirement.
SHARED REVENUE AND TAX RELIEF
19. Garbage and Trash Disposal and Collection
Sections 2234m, 9343 (9m) and 9443 (16p)
These sections remove garbage and trash disposal and collection from the list of municipal services eligible for reimbursement under the Payments for Municipal Services aid program unless the municipality provides the same services to business properties.
I am vetoing this provision because it will adversely impact the University of Wisconsin (UW) System, particularly the Oshkosh and Stevens Point campuses. If garbage and trash disposal services are no longer reimbursable, it is likely that municipalities will charge the UW for this service. Internally funding these services would be difficult for the UW System and could result in segregated fee increases for students.
20. Payments for Municipal Services Funding
Section 169 [as it relates to s.
20.835 (5) (a)] increases the funding available for the Payments for Municipal Services (PMS) program, which provides reimbursement to municipalities for the services they provide to state-owned facilities. Specifically, this section provides an additional $1,236,500 in fiscal year 1997-98 and $1,236,500 in fiscal year 1998-99 for the PMS Program. Although there is no language in the budget bill that authorizes this funding, the purpose of this funding increase was included in the Legislative Fiscal Bureau's summary of Senate action on AB 100.
I object to providing this increase in funding in fiscal year 1997-98 because I believe the PMS program can function effectively with base-level funds during the first year of the biennium. By lining out the Shared Revenue and Tax Relief s.
20.835 (5) (a) appropriation and writing in a smaller amount that deletes $1,236,500 GPR in fiscal year 1997-98, I am vetoing the part of the bill which provides this increase. I am also requesting the Department of Administration Secretary not to allot these funds.
I understand the financial pressures on local governments, and therefore support the increase of $1,236,500 in PMS payments in fiscal year 1998-99.
