[Act 9 Sections: 2166e thru 2166s]
[Act 9 Vetoed Sections: 2166m, 2166s, 9358(7c) and 9458(3c)]
1999 WISCONSIN ACT 10
Comparative Summary of Sales Tax Rebate Legislation
1. SALES TAX REBATE -- REBATE AMOUNTS AND APPROPRIATION
GPR $700,000,000
Governor: Provide a sales tax rebate in Wisconsin on a one-time basis to be paid during 1999-00 at an estimated cost of $700 million. Create a sum sufficient appropriation for this purpose. The rebate schedule is shown below.
Married-Joint & Single &
Wisconsin AGI Head-of-Household Married-Separate
$25,000 and Under $337 $190
25,001 to 50,000 345 198
50,001 to 75,000 362 216
75,001 to 100,000 380 233
100,001 to 200,000 414 267
200,001 to 500,000 457 311
500,001 and Over 500 354
Assembly: Modify the sales tax rebate schedule so that married couples filing a joint return would receive a rebate under one schedule and single, head-of-household and married-separate claimants would receive a rebate under a second schedule, as shown below. In addition, modify the schedule so that the rebate and income amounts for single, head-of-household and married-separate claimants would equal one-half of the married-joint amounts, with the exception of the first income range.
Single, Head-of-Household
Married-Joint and Married-Separate
$25,000 and Under $368
25,001 to 50,000 376 $25,000 and Under $188
50,001 to 75,000 394 25,001 to 37,500 197
75,001 to 100,000 414 37,501 to 50,000 207
100,001 to 200,000 452 50,001 to 100,000 226
200,001 to 500,000 498 100,001 to 250,000 249
500,001 and Over 546 250,001 and Over 273
Senate/Legislature: Reduce the rebate amounts from the Assembly and Joint Finance version to the amounts shown below and allow taxpayers who were claimed as a dependent on another person's return to receive the rebate if the individual had income of $5,000 or more and a state income tax liability in 1998.
Single, Head-of-Household
2. SALES TAX REBATE -- ELIGIBILITY AND CONDITIONS
Married-Joint Married-Separate and Dependent
$25,000 and Under $360
25,001 to 50,000 368 $25,000 and Under $184
50,001 to 75,000 385 25,001 to 37,500 193
75,001 to 100,000 405 37,501 to 50,000 203
100,001 to 200,000 442 50,001 to 100,000 221
200,001 to 500,000 487 100,001 to 250,000 244
500,001 and Over 534 250,001 and Over 267
[Act 10 Sections: 1 and 4]
Governor: Create the following eligibility requirements and conditions related to the sales tax rebate.
Eligibility, Calculation and Issuance Procedures. The following sections describe eligibility requirements and how the Department of Revenue (DOR) would calculate and issue the rebate for each category of recipient:
Residents Who Filed a 1998 Tax Return. Direct DOR to calculate and issue the rebate for full-year and part-year state residents automatically based on the individual's or married couple's filing status and AGI reported on their 1998 Wisconsin income tax return.
Resident Nonfilers Who Received a Homestead Credit in 1998. Direct DOR to calculate and issue the rebate automatically to those who filed a homestead credit form in 1998 but did not file a state income tax return. Direct DOR to calculate the rebate as if the individual's or couple's AGI is $25,000.
Resident Nonfilers. Specify that a resident or part-year resident individual or couple who did not file a 1998 income tax return or homestead credit form by October 15, 1999, would be eligible to receive a rebate only if a claim is filed with DOR by June 30, 2000. Require DOR to prepare a form no later than 60 days after the effective date of the bill for this purpose. Specify that these individuals and couples would receive the minimum rebate for the appropriate filing status.
Dependents. Specify that taxpayers who were claimed as a dependent on another person's 1998 federal income tax return would not be eligible for the rebate.
Nonresidents. Specify that a nonresident of Wisconsin would be eligible to receive a rebate if a claim is filed with DOR no later than 30 days after the effective date of a the bill. Direct DOR to prepare a form for this purpose. Require nonresident claimants to document their sales taxes paid to Wisconsin in 1998 in order to receive the rebate. The documented amount must be at least $20. The rebate would be calculated as 30.4% of the documented amount up to a maximum rebate of $354, which would apply to individual claimants as well as married couples.
Limitations and Conditions. The following limitations and conditions would apply to the sales tax rebate.
· Prohibit DOR from considering any adjustments or amendments to 1998 income tax returns that are made after October 15, 1999, in its calculation of the rebate.
· Specify that the rebate would first be applied against a debt that is owned to state agencies, municipalities, counties or for certified delinquent payments of child or family support, in the same manner as income tax refunds are currently applied under these offset provisions. Consider each spouse to have a 50% ownership interest in the rebate if only one spouse owes a debt.
· Allow DOR to enforce the rebate and take any action, conduct any proceeding and proceed as it is authorized in respect to income taxes under current law. Specify that the income tax provisions relating to assessments, refunds, appeals, collection, interest and penalties also apply.
· Allow married couples who filed joint returns to request a separate check for 50% of the joint rebate after the rebate has been issued but before the check, share draft or other draft has been cashed.
· Specify that the right to the rebate would lapse if DOR is unable to locate the individual or couple or if an issued check, share draft or other draft is not cashed by December 31, 2000.
· Specify that the rebates of residents who filed a 1998 income tax return or homestead credit claim and who become deceased after their tax returns or credit claims were filed would be paid to the claimant's estate.
· Provide that the provisions related to the sales tax rebate would not apply after December 31, 2000.
Assembly: Include the Governor's provisions with the following modifications:
Eligibility, Calculation and Issuance Procedures. Modify the eligibility requirements as follows.
Residents and Part-Year Residents Who Were Married to Nonresidents. Allow residents and part-year residents who were married to nonresidents to claim the rebate based on their Wisconsin AGI. However, the Assembly provision would still not allow part-year residents who were married to nonresidents who did not file an income tax return to receive the rebate.
Limitations and Conditions. Direct DOR to calculate the rebate for the family only of an individual who has been, or was, incarcerated in a state or federal prison during tax year 1998. In addition, prohibit DOR from sending any rebate checks to any state or federal prison facility.
Joint Finance: Specify that the rebate would be a "one-time rebate of nonbusiness consumer sales tax paid by individuals" rather than a "one-time sales tax rebate."
Eligibility, Calculation and Issuance Procedures. Modify eligibility, calculation and issuance procedures as follows.
Residents and Part-Year Residents Who Were Married to Nonresidents. Allow part-year residents who were married to nonresidents who did not file an income tax return to receive the rebate.
Nonresidents. Reduce the maximum rebate for nonresidents, from $354 to $273 to reflect the Assembly's reduced rebate amounts for single claimants. In addition, specify that a nonresident would not be eligible for a rebate if their spouse is eligible to receive a rebate.
Limitations and Conditions. Specify that the sales tax rebate would not be counted as income or an asset for the purposes of determining eligibility or benefits for the W-2 program, W-2 child care assistance and other state assistance programs in the month received and the following month. Direct the Department of Health and Family Services to seek a waiver from the federal government and amend its state plan to disregard the rebate in determining eligibility for medical assistance. In addition, specify that, to the extent allowed under federal law, state agencies must disregard the sales tax rebate as income or assets in determining eligibility or benefits under federal assistance programs.
Senate/Legislature. Include the Governor's and Finance Committee's provisions with the following modifications.
Eligibility, Calculation and Issuance Procedures. Modify the eligibility requirements as follows.
Dependents. Allow taxpayers who were claimed as a dependant on another person's federal income tax return in 1998 to receive the rebate if the individual had Wisconsin AGI of $5,000 or more and a state income tax liability in 1998.
[Act 10 Sections: 4 and 6(1)]
3. PROPERTY TAX/RENT CREDIT
Governor: Eliminate the property tax/rent credit (PTRC) beginning with the 1999 tax year. Compared to Act 9, this would increase general fund revenues by an estimated $399.1 million in 1999-00 and $241.7 million in 2000-01 for a total of $640.8 million over the biennium.
Under Act 9, the PTRC would have been equal to 16.4% of the first $2,000 in property taxes or rent constituting property taxes to a maximum credit of $328 in 1999. For tax year 2000, the PTRC would have been 10% of property taxes or rent to a maximum credit of $200. The PTRC would have been eliminated beginning with the 20001 tax year.
Assembly/Joint Finance: Restore the PTRC beginning in tax year 2001 at 10% of property taxes or rent to a maximum of $2,000, for a maximum credit of $200. Restoring the PTRC in tax year 2001 would have no impact on revenues during the 1999-01 biennium.
Senate/Legislature: Restore the PTRC in 1999 and 2000 at 8.4% to a maximum of $2,000 of property taxes or rent for a maximum credit of $168. This would reduce income tax revenues by an estimated $208.0 million in 1999-00 and $203.0 million in 2000-01. The 10% PTRC for 2001 and thereafter as adopted by the Assembly and Joint Finance would be retained.
Veto by Governor: Eliminate the PTRC for tax years 1999 and thereafter. Compared to the enrolled bill passed by the Legislature, this would increase income tax revenues by an estimated $208.0 million in 1999-00 and $203.0 million in 2000-01.
[Act 10 Sections: 1m, 2, 2m and 3]
[Act 10 Vetoed Section: 2m]
4. SCHOOL LEVY TAX CREDIT
GPR $700,000
Governor/Legislature: Delete the $60,000,400 increase in the December, 2000, school levy tax credit created by the Governor's partial vetoes of Act 9. Since the payment of this credit would have been made in 2001-02, the repeal does not affect appropriations in the 1999-01 biennium. However, the closing balance of the general fund for 2000-01 under Act 9 included funding that the Governor indicated was intended to be carried into 2001-02 to make this payment. Under this provision, that carry-forward would not be needed.
Increase the 2000-01 sum sufficient appropriations for the homestead tax credit and farmland preservation credit by $500,00 and $200,000, respectively, to reflect the deletion of the expanded school levy tax credit.
[Act 10 Section: 5]
5. ADMINISTRATIVE FUNDING
GPR $2,357,500
Governor/Legislature: Provide $2,357,500 GPR to DOR in 1999-00 to administer the sales tax rebate. The following chart shows a breakdown of the components of the administrative costs.
Sales Tax Rebate Administrative Costs
Personnel
Permanent salaries (for overtime) $240,400
LTE salaries 139,200
Fringe benefits 65,500
Subtotal $445,100
Administration
Contract programming, InfoTech costs and other related expenses $241,900
Printing claim forms, envelopes, postage 702,400
Distributing rebate checks and related expenses 93,400
Furniture, rent and telephone expenses 67,200
Printing, storage, security and transportation of rebate checks 480,000
Processing rebate checks 327,500
Subtotal $1,912,400
TOTAL $2,357,500
[Act 10 Section: 7]
6. APPROPRIATION REDUCTIONS
Governor/Assembly/Joint Finance: No provision.
