2005 BILL
AN ACT ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
gambling
This bill authorizes DOR to use the provisions under current law for assessing, collecting, and reviewing delinquent income and franchise taxes to assess, collect, and review any unpaid amount owed by a retailer to the DOR in connection with the state lottery.
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:
SECTION 1. 565.48 of the statutes is created to read:
565.48 Collection of unpaid liabilities. Any unpaid amount owed by a retailer to the department under this chapter shall be assessed, collected, and reviewed in the same manner as income taxes are assessed, collected, and reviewed under ch. 71.
(End)
LRB-0305LRB-0305/4
JK:wlj:ch
2005 - 2006 LEGISLATURE
DOA:......Koskinen, BB0074 - Intercepting state disbursements to pay state and local debts
For 2005-07 Budget -- Not Ready For Introduction
2005 BILL
AN ACT ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
taxation
Other taxation
Under current law, if a person owes a debt to a state agency, the state agency may certify the debt to DOR so that DOR may collect the debt for the agency by subtracting the amount of the debt from any tax refund owed to the debtor. Also, under current law, if a person owes a debt in the form of unpaid fines, fees, or forfeitures to a county or municipality, the county or municipality may certify the debt to DOR so that DOR may collect the debt for the county or municipality by subtracting the amount of the debt from any tax refund owed to the debtor. DOR periodically pays the debts collected for state agencies, counties, and municipalities, less administrative fees, to the appropriate state agencies, counties, and municipalities that certified debts to DOR.
This bill permits DOA to collect a debt owed to a state agency or to a county or municipality by reducing any payment DOA makes to the debtor by the amount of the debt and submitting such amount to DOR. DOR then pays the amount, less administrative fees, to the appropriate state agency, county, or municipality that certified a debt to DOR.
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:
SECTION 1. 71.93 (1) (cm) of the statutes is created to read:
71.93 (1) (cm) "Disbursement" means any payment to a person who provides goods and services to the state under subch. IV or V of ch. 16 or under ch. 84.
SECTION 2. 71.93 (2) of the statutes is amended to read:
71.93 (2) CERTIFICATION. A state agency may certify to the department for setoff any properly identified debt exceeding $20 so that the department may set off the amount of the debt against a refund to the debtor or so that the department of administration may reduce a disbursement to the debtor by the amount of the debt. At least 30 days prior to certification each debtor shall be sent a notice by the state agency of its intent to certify the debt to the department for setoff or reduction and of the debtor's right of appeal. At the time of certification, the certifying state agency shall furnish the social security number of individual debtors and the federal employer identification number of other debtors.
SECTION 3. 71.93 (3) of the statutes is renumbered 71.93 (3) (a) and amended to read:
71.93 (3) (a) ADMINISTRATION. In administering this section the department shall first check with the state agency certifying the debt to determine whether the debt has been collected by other means. If the debt remains uncollected the department of revenue shall setoff any debt or other amount owed to the department, regardless of the origin of the debt or of the amount, its nature or its date. If after the setoff there remains a refund in excess of $10, the department shall set off the remaining refund against certified debts of other state agencies. If more than one certified debt exists for any debtor, the refund shall be first set off against the earliest debt certified, except that no child support or spousal support obligation submitted by an agency of another state may be set off until all debts owed to and certified by state agencies of this state have been set off. When all debts have been satisfied, any remaining refund shall be refunded to the debtor by the department. Any legal action contesting a setoff under this paragraph shall be brought against the state agency that certified the debt under sub. (2).
SECTION 4. 71.93 (3) (b) of the statutes is created to read:
71.93 (3) (b) The department shall provide the information obtained under sub. (2) to the department of administration. Before reducing any disbursement as provided under this paragraph, the department of administration shall contact the department to verify whether a certified debt that is the basis of the reduction has been collected by other means. If the certified debt remains uncollected, the department of administration shall reduce the disbursement by the amount of the debtor's certified debt under sub. (2), notify the department of such reduction and disbursement, and remit the amount of the reduction to the department in the manner prescribed by the department. If more than one certified debt exists for any debtor, the disbursement shall be reduced first by any debts certified under s. 73.12 then by the earliest debt certified. Any legal action contesting a reduction under this paragraph shall be brought against the state agency that certified the debt under sub. (2).
SECTION 5. 71.93 (4) of the statutes is amended to read:
71.93 (4) SETTLEMENT. Within 30 days after the close of each calendar quarter, the department shall settle with each state agency that has certified a debt. Each settlement shall note the opening balance of debts certified, any additions or deletions, reductions or amounts set off, and the ending balance at the close of the settlement period.
SECTION 6. 71.93 (5) of the statutes is amended to read:
71.93 (5) STATE AGENCY CHARGED FOR COSTS. At the time of each settlement, each state agency shall be charged for administration expenses, and the amounts charged shall be credited to the department's appropriation under s. 20.566 (1) (h). Annually on or before November 1, the department shall review its costs incurred during the previous fiscal year in administering state agency setoffs and reductions and shall adjust its subsequent charges to each state agency to reflect that experience.
SECTION 7. 71.93 (6) of the statutes is amended to read:
71.93 (6) WRITTEN AGREEMENT AND AUTHORITY OF DEPARTMENT. Any state agency wishing to certify debts to the department shall enter into a written agreement with the department prior to any certification of debt. Any certification of debts by a state agency or changes to certified debts shall be in a manner and form prescribed by the department. The secretary of revenue shall be the final authority in the resolution of any interagency disputes in regard to certification of debts. If a refund or disbursement is adjusted after a setoff or reduction, the department may readjust any erroneous settlement with a certifying state agency.
SECTION 8. 71.93 (7) of the statutes is amended to read:
71.93 (7) EXCHANGE OF INFORMATION. Information relative to changes to any debt certified shall be exchanged promptly by each agency and the department setoff. Setoff of refunds and reduction of disbursements against debts certified by agencies, and any reports report of the setoff or reduction to certifying state agencies, is not a violation of ss. 71.78, 72.06, 77.61 (5), 78.80 (3), and 139.38 (6).
SECTION 9. 71.935 (1) (cm) of the statutes is created to read:
71.935 (1) (cm) "Disbursement" means any payment to a person who provides goods and services to the state under subch. IV or V of ch. 16 or under ch. 84.
SECTION 10. 71.935 (3) of the statutes is renumbered 71.935 (3) (a) and amended to read:
71.935 (3) (a) If the debt remains uncollected and, in the case of a parking citation, if the debtor has not contested the citation within 20 days after the notice under sub. (2), the department shall set off the debt against any refund that is owed to the debtor after the setoff under s. 71.93. Any legal action contesting a setoff shall be brought against the municipality or county that certified the debt under sub. (2).
SECTION 11. 71.935 (3) (b) of the statutes is created to read:
71.935 (3) (b) The department shall provide the information obtained under sub. (2) to the department of administration. Before reducing any disbursement as provided under this paragraph, the department of administration shall contact the department to verify whether a certified debt that is the basis of the reduction has been collected by other means and, in the case of a parking citation, whether the debtor has contested the citation within 20 days after the notice under sub. (2). If the certified debt remains uncollected and, in the case of a parking citation, the citation has not been contested within 20 days after the notice under sub. (2), the department of administration shall, after any reduction under s. 71.93, reduce the disbursement by the amount of the debtor's certified debt under sub. (2), notify the department of such reduction and disbursement, and remit the amount of the reduction to the department in the manner prescribed by the department. If more than one debt certified under sub. (2) exists for any debtor, the disbursement shall be reduced first by the earliest debt certified. Any legal action contesting a reduction under this paragraph shall be brought against the municipality or county that certified the debt under sub. (2).
SECTION 12. 71.935 (4) of the statutes is amended to read:
71.935 (4) Within 30 days after the end of each calendar quarter, the department shall settle with each municipality and county for the amounts that the department setoff set off or reduced against certified debts for the municipality or county during that calendar quarter.
SECTION 13. 71.935 (5) of the statutes is amended to read:
71.935 (5) At the time of each settlement, each municipality and county shall be charged for administration expenses, and the amounts charged shall be credited to the appropriation account under s. 20.566 (1) (h). Annually on or before November 1, the department shall review its costs incurred during the previous fiscal year in administering setoffs and reductions under this section and shall adjust its subsequent charges to each municipality and county to reflect that experience.
SECTION 14. 73.12 (1) (b) of the statutes is amended to read:
73.12 (1) (b) "Vendor" means a person providing goods or services to this state under subch. IV or V of ch. 16 or under ch. 84 if the value of the contract for those goods or services is at least $500.
(End)
LRB-0306LRB-0306/2
JK:wlj:rs
2005 - 2006 LEGISLATURE
DOA:......Koskinen, BB0068 - Require withholding from nonresident members of pass-through entities
For 2005-07 Budget -- Not Ready For Introduction
2005 BILL
AN ACT ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
taxation
Income taxation
This bill requires a partnership, a limited liability company, a tax-option corporation, an estate, or a trust that is treated as a pass-through entity for federal income tax purposes to withhold income taxes from income that the entity distributes to a nonresident partner, member, shareholder, or beneficiary.
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:
SECTION 1. 71.775 of the statutes is created to read:
71.775 Withholding from nonresident members of pass-through entities. (1) DEFINITIONS. In this section:
(a) "Nonresident" includes an individual who is not domiciled in this state; a partnership, limited liability company, or corporation whose commercial domicile is outside the state; and an estate or a trust that is a nonresident under s. 71.14 (1) to (3m).
(b) "Pass-through entity" means a partnership, a limited liability company, a tax-option corporation, an estate, or a trust that is treated as a pass-through entity for federal income tax purposes.
(2) WITHHOLDING TAX IMPOSED. (a) For the privilege of doing business in this state or deriving income from property located in this state, a pass-through entity that has Wisconsin income for the taxable year that is allocable to a nonresident partner, member, shareholder, or beneficiary shall pay a withholding tax. The amount of the tax imposed under this subsection to be withheld from the income distributable to each nonresident partner, member, shareholder, or beneficiary is equal to the nonresident partner's, member's, shareholder's, or beneficiary's share of income attributable to this state, multiplied by the following:
1. For an individual, an estate, or a trust that is a pass-through entity, the highest tax rate for a single individual for the taxable year under s. 71.06.
2. For a partnership, a limited liability company, or a tax-option corporation that is a pass-through entity, the highest tax rate for the taxable year under s. 71.27.
(b) A pass-through entity that is also a member of another pass-through entity is subject to withholding under this subsection and shall pay the tax based on the share of income that is distributable to each of the entity's nonresident partners, members, shareholders, or beneficiaries.
(3) EXEMPTIONS. (a) A nonresident partner's, member's, shareholder's, or beneficiary's share of income from the pass-through entity that is attributable to this state shall not be included in determining the withholding under sub. (2) if any of the following applies:
1. The partner, member, shareholder, or beneficiary is exempt from taxation under this chapter. For purposes of this subdivision, the pass-through entity may rely on a written statement from the partner, member, shareholder, or beneficiary claiming to be exempt from taxation under this chapter, if the pass-through entity attaches a copy of the statement to its return for the taxable year and if the statement specifies the name, address, federal employer identification number, and reason for claiming an exemption for each partner, member, shareholder, or beneficiary claiming to be exempt from taxation under this chapter.
2. The partner, member, shareholder, or beneficiary has no Wisconsin income other than his or her share of income from the pass-through entity that is attributable to this state and his or her share of such income is less than $1,000.
(b) A pass-through entity that is a joint venture is not subject to the withholding under sub. (2), if the pass-through entity has elected not to be treated as a partnership under section 761 of the Internal Revenue Code.
(4) ADMINISTRATION. (a) Each pass-through entity that is subject to the withholding under sub. (2) shall pay the amount of the tax withheld to the department no later than:
1. For tax-option corporations, the 15th day of the 3rd month following the close of the taxable year.
2. For partnerships, limited liability companies, estates, and trusts, the 15th day of the 4th month following the close of the taxable year.
(b) 1. If the pass-through entity has an extension of time to file its return, the tax withheld under sub. (2) is due on the unextended due date of the entity's return as provided under s. 71.13 (1), 71.20 (1), or 71.24 (1).
2. A pass-through entity that pays the tax withheld under sub. (2) as provided under subd. 1. is not subject to an underpayment of estimated tax under s. 71.09 or 71.29, if 90 percent of the tax that is due for the current taxable year is paid by the unextended due date or if 100 percent of the tax that is due for the taxable year immediately preceding the current taxable year is paid by the unextended due date and the taxable year immediately preceding the current taxable year was a 12-month period. Interest at the rate 12 percent shall be imposed on the unpaid amount of the tax withheld under sub. (2) during any extension period and interest at the rate of 18 percent shall be imposed on the unpaid amount of the tax withheld under sub. (2) for the period beginning with the extended due date and ending with the date that the unpaid amount is paid in full.
(c) On or before the due date, including extensions, of the entity's return, a pass-through entity that withholds tax under sub. (2) shall annually notify each of its nonresident partners, members, shareholders, or beneficiaries of the amount of the tax withheld under sub. (2) that the pass-through entity paid on the nonresident partner's, member's, shareholder's, or beneficiary's behalf. The pass-through entity shall provide a copy of the notice to the department with the return that it files for the taxable year.
(d) A nonresident partner, member, shareholder, or beneficiary of a pass-through entity may claim a credit, as prescribed by the department, on his or her Wisconsin income or franchise tax return for the amount withheld under sub. (2) on his or her behalf. For purposes of this paragraph, the amount withheld under sub. (2) is considered to be paid on the last day of the pass-through entity's taxable year for which the tax is paid.
(e) Any tax withheld under this section shall be held in trust for this state, and a pass-through entity subject to withholding under this section shall be liable to the department for the payment of the tax withheld. No partner, member, shareholder, or beneficiary of a pass-through entity shall have any right of action against the pass-through entity with respect to any amount withheld and paid in compliance with this section.
(f) If a pass-through entity subject to withholding under this section fails to withhold tax as required by this section, the pass-through entity shall be liable for any tax, interest, and penalties. If a nonresident partner, member, shareholder, or beneficiary of the pass-through entity files a return and pays the tax due, the pass-through entity shall not be liable for the tax, but shall be liable for any interest and penalties otherwise applicable for failure to withhold, as provided under ss. 71.82 (2) (d) and 71.83.
SECTION 9341. Initial applicability; revenue.
(1) WITHHOLDING TAXES FROM NONRESIDENT MEMBERS OF PASS-THROUGH ENTITIES. The treatment of section 71.775 of the statutes first applies to taxable years beginning on January 1, 2005.
(End)
LRB-0307LRB-0307/2
RLR:kjf:rs
2005 - 2006 LEGISLATURE
DOA:......Koskinen, BB0077 - Lottery Retailers Worker's Compensation Debt
For 2005-07 Budget -- Not Ready For Introduction
