[Bill Sections: 1654, 1807, 1808, 1810 and 9443(3)&(4)]
Tax Administration
21. MINNESOTA-WISCONSIN INCOME TAX RECIPROCITY PAYMENTS
GPR $12,500,000
Governor: Provide $4,500,000 in 1999-00 and $8,000,000 in 2000-01 to reflect estimated Minnesota-Wisconsin income tax reciprocity payments. Total funding after these adjustments would be $44,500,000 in 1999-00 and $48,000,000 in 2000-01.
22. ILLINOIS-WISCONSIN INCOME TAX RECIPROCITY PAYMENTS
GPR - $2,750,000
Governor: Increase funding by $2,750,000 in 1999-00 and decrease funding by $5,500,000 in 2000-01 to reflect Illinois-Wisconsin income tax reciprocity payments. Total funding after these adjustments would be $8,250,000 in 1999-00. Under the current agreement, no payment will be made in 2000-01. However, payments will resume in 2001-02.
23. ILLINOIS-WISCONSIN INCOME TAX RECIPROCITY STUDY
GPR $2,500
Governor: Increase funding by $28,400 in 1999-00 and decrease funding by $25,900 in 2000-01 for a study to provide data for determining future income tax reciprocity payments between Wisconsin and Illinois. Total funding of $105,000 in 1999-00 and $50,700 in 2000-01 would be provided under this provision.
24. INTEREST ON OVERPAYMENT OF TAXES
GPR $700,000
Governor: Provide $300,000 in 1999-00 and $400,000 in 2000-01 for estimated interest paid on the overpayment of individual income taxes. Total funding would be $800,000 in 1999-00 and $900,000 in 2000-01.
25. SALES TAX LATE FILING FEE
GPR-REV $2,530,000
Governor: Increase the late filing fee for delinquent sales and use tax returns from $10 to $30. The current law exception from paying the fee in cases where there is a reasonable cause would be modified to require a good cause but not due to neglect. The bill would also clarify a provision regarding security that may be required by the Department for retailers. These provisions would first apply to sales and use tax returns that are filed for periods beginning after September 30, 1999. It is estimated that the increase in the late filing fee would result in additional general fund revenues of $1,130,000 in 1999-00 and $1,400,000 in 2000-01.
Under current law, delinquent sales and use tax returns are subject to a $10 late filing fee. However, the fee is not imposed in cases where the person who was required to file the return has died or where the return was not filed because of a reasonable cause and not because of neglect.
[Bill Sections: 1815 and 9343(8)]
26. COMPROMISING NONDELINQUENT TAXES
Governor: Authorize a taxpayer to petition the Department of Revenue to compromise taxes that are owed to the state but are not yet delinquent including costs, interest and penalties. The petition would have to be submitted on a form prescribed by the Department and include a sworn statement from the taxpayer. DOR would be authorized to examine the petitioner under oath concerning the matter and require the taxpayer to provide financial statements and other related information.
If the Department found that the taxpayer was unable to pay the taxes, costs, interest and penalties in full, it would be required to determine the amount that the taxpayer could pay and enter an order reducing the taxes, costs, penalties and interest in accordance with the determination. The compromise would be effective only if the amount owed was paid within ten days from the date the order was issued. Upon payment of the amount owed, DOR would credit the unpaid portion of the principal amount of the taxes and make an appropriate record of the unpaid amount of penalties, costs and interest accrued.
If, within three years of the date of the compromise order, DOR determined that the taxpayer had income or property sufficient to enable the taxpayer to pay the remainder of the tax, costs, penalties and interest, the Department would be required to reopen the matter and order the payment in full of the amount owed. Before entering such an order, DOR would be required to notify the taxpayer in writing of the Department's intention. If the taxpayer requested it, a hearing would be arranged. Once the order was entered, the Department would make a record of the taxes, costs, interest and penalties and they would become immediately due and payable. The taxes would be subject to interest and the delinquent tax fee. DOR would be required to immediately proceed to collect the amounts due and to impose the delinquent tax fee.
These provisions would take effect on the first day of the second month beginning after publication of the bill.
Under current law, DOR has authority to compromise delinquent income and franchise taxes including costs, penalties and interest, under provisions that are essentially the same as those described above. The bill would authorize DOR to compromise all types of taxes (not just income and franchise) that are owed to the state, but not yet delinquent.
[Bill Sections: 1803 and 9443(5)]
27. TAX APPEALS COMMISSION -- SUMMARY PROCEEDINGS
Governor: Replace the current provisions regarding "small claims" cases with similar provisions relating to "summary proceedings." A summary proceeding would be a matter in which the amount in controversy, including any penalty, after DOR takes its final action on the petition for redetermination, is less than $100,000. Exceptions would include cases where: (a) the Commission on its own motion determines that the case should not be heard as a summary proceeding; or (b) DOR or a party petitioning for review alleges that the case involves a constitutional issue or has statewide significance. A commissioner hearing a summary proceeding would have the same discretion as a judge under statutory alternative dispute resolution provisions to order the parties to select a settlement provided under those provisions. A commissioner assigned by the chairperson prior to the hearing would decide summary proceedings. In summary proceedings, the presiding commissioner would render an oral decision at the close of the hearing or a written decision to all parties within two weeks. Decisions in summary proceedings would not be precedents. Provisions governing DOR actions in response to adverse rulings would not apply to summary hearings. The Commission would be required to include a Summary Proceedings Division.
The bill would also provide that, in matters that are not heard as summary proceedings, consent of the parties would no longer be required for the presiding commissioner to render an oral decision. These provisions would first apply to appeals filed for tax years beginning on January 1, 2000.
Under current law, the Tax Appeals Commission is authorized to hear small claims cases. Small claims are matters in which the amount in controversy, including any penalty, after DOR takes final action on the petition for redetermination, is less than $2,500, unless the Commission determines not to hear the case as a small claims case or DOR determines that the case has statewide significance. Small claims cases are decided by one commissioner assigned by the chairperson prior to the hearing. In small claims cases, the presiding commissioner, without consent of the parties, may render either an oral decision at the close of the hearing or a written
decision to all parties within two weeks. Adverse ruling provisions do not apply to small claims cases. The Commission is currently required to include a Small Claims Division.
[Bill Sections: 18, 1791, 1795 thru 1797 and 9343(22)]
28. TAX APPEALS COMMISSION -- PENALTY FOR FRIVOLOUS OR GROUNDLESS APPEALS
Governor: Increase, from $1,000 to $5,000, the penalty that may be assessed for proceedings before the Tax Appeals Commission that are pursued primarily for delay or that are frivolous or groundless. This provision would first apply to appeals filed for tax years beginning on January 1, 2000.
[Bill Sections: 1794 and 9343(22)]
29. TAX APPEALS COMMISSION -- HEARING LOCATIONS
Governor: Provide that Commission hearings must be held in any of the following cities: Appleton, Eau Claire, LaCrosse, Madison, Milwaukee and Wausau. Under current law, the time and place of meetings and hearings of the Commission are designated by the chairperson. This modification would first apply to appeals filed for tax years beginning on January 1, 2000.
[Bill Sections: 1792 and 9343(22)]
ADMINISTRATION
Budget Change Items
General Agency Provisions
1. STANDARD BUDGET ADJUSTMENTS
Funding Positions
GPR $507,500 0.00
FED 29,100 - 1.00
PR - 6,260,200 - 2.00
SEG 81,400 0.00
Total - $5,642,200 - 3.00
Governor: Provide adjustments totaling $250,200 GPR, $12,700 FED, -$3,130,100 PR, and $40,700 SEG in 1999-00 and $257,300 GPR, $16,400 FED, -$3,130,100 PR, and $40,700 SEG in 2000-01 and -3.0 positions (-1.0 FED and -2.0 PR) for: (a) turnover reductions (-$150,900 GPR and -$745,600 PR annually); (b) removal of non-continuing elements from the base (-$35,700 FED and -$4,921,300 PR annually, and -1.0 FED and -2.0 PR positions); (c) full funding of salary and fringe benefit costs ($320,900 GPR, $39,000 FED, $1,818,900 PR, and $39,300 SEG in 1999-00 and $324,900 GPR, $39,000 FED, $1,818,900 PR, and $39,300 SEG in 2000-01); (d) full funding of financial services charges ($4,400 GPR, $30,800 PR, $1,000 SEG annually); (e) reclassifications ($8,000 GPR and $8,400 FED in 1999-00 and $11,100 GPR and $12,100 FED in 2000-01); (f) overtime ($15,500 GPR and $572,300 PR annually); (g) night and weekend differential ($1,400 GPR and $74,400 PR annually); (h) fifth vacation week as cash ($23,300 GPR, $1,000 FED, $40,400 PR and $400 SEG annually); (i) full funding of lease costs ($27,600 GPR annually); and (j) minor transfer within the same appropriation (no net fiscal impact).
2. REQUIRED BASE LEVEL STATE OPERATIONS FUNDING LAPSE
Funding Positions
GPR - $406,000 - 0.20
FED 9,000 0.00
PR 48,400 0.20
Total $348,600 0.00
Governor: Reduce base level funding by $203,000 GPR annually and 0.2 GPR positions to make permanent a 2% annual lapse requirement imposed by 1997 Wisconsin Act 27. Annual reductions are made in the following programs: (a) DOA's general program operations appropriation (-$120,900); (b) special and executive committees appropriation (-$7,300); (c) Women’s Council (-$1,500); (d) Division of Hearings and Appeals (-$30,500); (e) Office of Justice Assistance (-$4,500); (e) Tax Appeals Commission (-$8,300); and (f) Division of Housing (-$30,000).
Also, provide increases of $4,500 FED and $24,200 PR annually and 0.2 PR positions to offset a portion of the required 2% GPR reduction. The increase of $4,500 FED annually would be used by OJA to fund existing staff. The increase of $24,200 PR annually and 0.2 PR positions would offset the reduction to DOA's general program operations GPR appropriation. Revenue for the PR increase comes from charges to other agencies for DOA services.
3. DEBT SERVICE REESTIMATES
GPR $156,800
PR - 4,078,900
Total $3,922,100
Governor: Provide adjustments of $21,700 GPR and -$1,847,600 PR in 1999-00 and $135,100 GPR and -$2,231,300 PR in 2000-01 for debt service costs associated with state office building and other facility construction projects. The changes are for the following:
a. Funding increases ($21,700 GPR in 1999-00 and $135,100 GPR in 2000-01) associated with the principal and interest costs on bonding used for adapting for public use the Black Pointe Estate in Lake Geneva.
b. Funding decreases (-$208,300 PR in 1999-00 and -$204,900 PR in 2000-01) associated with the principal and interest costs for the financing of land acquisition for and construction of parking facilities in Madison. Total debt service for parking facilities would be $1,251,800 PR in 1999-00 and $1,255,200 PR in 2000-01. Funding for the parking facility debt service costs are provided from charges assessed for parking in state-owned parking spaces in Madison.
c. Funding decreases (-$1,639,300 PR in 1999-00 and -$2,026,400 PR in 2000-01) associated with the principal and interest costs for the financing of the acquisition, construction, development, enlargement, or improvement of facilities housing state agencies. Total debt service costs for construction and remodeling costs associated with state office buildings managed by DOA would be $9,509,600 PR in 1999-00 and $9,122,500 PR in 2000-01. Funding for these debt service costs are provided from charges assessed state agencies for renting space in state office buildings.
4. REPEAL OF SEPARATE STATE PROSECUTORS OPERATIONS APPROPRIATION
Governor: Repeal the sum certain GPR appropriation for the State Prosecutor's Office and instead include funding for that Office within the GPR sum certain general program operations appropriation for DOA. The 1998-99 base level funding for the office was $203,500, which would be combined with DOA's general program operations that had 1998-99 base level funding of $8,582,400 GPR.
