Under this bill, for claims filed in 2011 and thereafter, the maximum household
income is indexed for inflation. Also under the bill, as a claimant's income exceeds
the threshold income amount, the credit is phased out until the credit equals zero
when income exceeds the maximum income as adjusted for inflation.
Under current law, a corporation may claim an income and franchise tax credit
in an amount equal to 5 percent of its qualified research expenses, as defined by the
Internal Revenue Code, for research conducted in this state. In addition, a
corporation may claim an income and franchise tax credit equal to 5 percent of the
amount that it paid in the taxable year to construct and equip new facilities or
expand existing facilities used in this state for qualified research, as defined by the
Internal Revenue Code.
Under this bill, a corporation may also claim an income and franchise tax credit
equal to its qualified research expenses in the taxable year for research conducted
in this state that exceeds the amount equal to the average amount of the
corporation's qualified research expenses in the previous three taxable years
multiplied by 1.25. If the credit claimed by a corporation exceeds the corporation's
tax liability, the state does not issue a refund, but the corporation may carry forward
any remaining credit to five subsequent taxable years.
This bill allows a business to claim an income and franchise tax credit in an
amount up to 10 percent of the wages that the business paid in the taxable year to
certain full-time employees, as determined by Commerce. A business may also claim
a credit for the costs it incurred for certain job-related training. If the amount of the
taxpayer's credits exceed the taxpayer's tax liability, the taxpayer receives a refund.
This bill creates a refundable individual income tax credit for a beginning
farmer who enters into at least a three-year lease of an established farmer's
agricultural assets, other than land, and uses the assets for farming, and a
refundable individual and corporate income and franchise tax credit for the
established farmer whose assets are leased. If the amount of credit due a claimant
exceeds the claimant's tax liability, the excess is refunded to the claimant by check.
The credit first applies to taxable years beginning on January 1, 2011.
Under the bill, beginning farmer may claim a credit of up to $500 on a one-time
basis for the cost to enroll in a course in farm financial management that is offered
by an educational institution, such as the UW-Madison, UW-Extension, or the
Wisconsin Technical College System. An established farmer may claim a credit of 15
percent of the amount of payments received each year from the beginning farmer for
the lease of the farm assets, except that the credit may be claimed by the established
farmer only for the first three years of the lease.
A beginning farmer must have a net worth of less than $200,000 and have
farmed for fewer than ten years out of the preceding 15 years. An established farmer
must have engaged in farming for at least ten years.
Under current law, after December 31, 2009, individuals and certain entities,
including fiduciaries, corporations, and insurance companies, that are health care
providers may receive a credit on income taxes based on purchases of information
technology hardware and software for making and keeping electronic medical
records. This bill delays the effective date of the tax credit until after December 31,
2011.
Under current law, there is an income tax exclusion for individuals, fiduciaries,
members of limited liability corporations and partnerships, and shareholders of
tax-option corporations (claimants) for 60 percent of the net long-term capital gains
realized from the sale of assets held for at least one year. This bill reduces the
exclusion to 40 percent.
Also under this bill, for taxable years beginning after December 31, 2010, a
claimant may elect to defer the payment of income taxes on up to $10,000,000 of the
gain realized from the sale of any capital asset held more than one year (original
asset) that is treated as a long-term gain under the Internal Revenue Code (IRC),
if the claimant completes a number of requirements. The bill specifies that the basis
of the investment is the amount of the investment minus the gain generated by the
sale of the original asset. If a claimant defers the payment of income taxes on the
gain generated by the sale of the original asset, the claimant may not use that gain
to net the claimant's gains and losses as the claimant could do if the claimant did not
elect to defer the payment of taxes on the gain.
Under current law, 50 percent of the sales of the following tangible personal
property must be included in a taxpayer's sales factor for income and franchise tax
purposes:
1. Property that is shipped from storage in this state to the federal government
outside this state, if the destination state does not have tax jurisdiction over the
taxpayer.
2. Property that is shipped from storage in this state to a purchaser, other than
the federal government, if the destination state does not have tax jurisdiction over
the taxpayer.
3. Property sold by an office in this state, but not shipped from this state, if
neither the state from which the property is shipped nor the destination state has
tax jurisdiction over the taxpayer.
Under this bill, 100 percent of the sales of all such tangible personal property
must be included in a taxpayer's sales factor.
Under current law, 50 percent of the following must be included in a taxpayer's
sales factor for income and franchise tax purposes:
1. Gross receipts from the use of computer software that are received in a state
in which the taxpayer is not subject to an income tax, if the taxpayer's commercial
domicile is in this state.
2. Gross receipts from services, if the benefit of service is received in a state in
which the taxpayer is not subject to an income tax, but the taxpayer's employees or
representative's performed services from a location in this state.
Under this bill, 100 percent of such gross receipts must be included in a
taxpayer's sales factor.
Under current law, in order to claim the angel investment credit or the early
stage seed investment credit, the taxpayer must hold the investment for at least
three years. If a taxpayer holds the investment that is the basis for an angel
investment credit for less than one year, the taxpayer must pay DOR the amount of
the credit that the taxpayer received.
Under this bill, if a taxpayer holds an investment that is the basis for an angel
investment credit or early stage seed investment credit for less than three years, the
taxpayer must pay DOR the amount of the credit that the taxpayer received.
This bill adopts, for state income and franchise tax purposes, certain changes
made in IRC.
Under federal law, a business may deduct a percentage of income derived from
qualified domestic production activities, regardless of whether those activities
occurred in this state. The percentage of income derived from such activities that a
business may claim as a deduction is 3 percent in 2005 and 2006, 6 percent in 2007,
2008, and 2009, and 9 percent for 2010 and subsequent years. Under this bill, the
increased deduction for qualified domestic production activities does not apply for
state income and franchise tax purposes for taxable years beginning on or after
January 1, 2009.
This bill provides an income and franchise tax credit for 10 percent of the
amount that a person pays in the taxable year for meat processing modernization or
expansion related to the person's meat processing operation.
Under current law, a person may claim a credit against the person's income or
franchise tax liability that is equal to 10 percent of the amount that the person paid
in the taxable year for dairy manufacturing modernization or expansion related to
the claimant's dairy manufacturing operation. If the amount of the credit exceeds
the amount of the person's tax liability, the person receives a refund. Under current
law, dairy cooperatives are generally not subject to state income or franchise taxes
and therefore are not eligible to claim the credit for dairy manufacturing
modernization or expansion.
This bill allows the members of a dairy cooperative to claim the credit for the
dairy manufacturing modernization or expansion expenses paid by the cooperative.
The dairy cooperative determines the amount of the credit that each member may
claim based on the amount of milk each member delivers to the cooperative.
Under current law, a person who owns an income-producing historic building
may claim a federal income tax credit that is equal to 20 percent of certain costs to
rehabilitate the historic building. To claim the credit, the building must be listed,
or be eligible for listing, on the national register of historic places or located in certain
national, state, or local historic districts, and the rehabilitation work must comply
with standards established by the secretary of the interior.
Under current law, a person who may claim the federal income tax credit for
rehabilitating an income-producing historic building may also claim a state income
tax or franchise tax credit equal to 5 percent of certain costs to rehabilitate the
historic building. To claim the credit, the person must include with the person's tax
return evidence that the secretary of the interior approved the rehabilitation work
before the work began.
Under this bill, a person may claim the state income and franchise tax credit
for rehabilitating an income-producing historic building if the person includes with
the person's tax return evidence that the state historic preservation officer
recommended the rehabilitation work for approval by the secretary of the interior
before the rehabilitation work began and that the rehabilitation was approved by the
secretary of the interior.
Under current law, any extension of time to file a federal individual income or
corporate income or franchise tax return granted under federal law or by the Internal
Revenue Service (IRS) automatically extends the time to file the corresponding
Wisconsin individual income or corporate income or franchise tax return. If the
federal extension is granted due to a presidentially declared disaster or terroristic
or military action, however, Wisconsin taxpayers are charged interest at the rate of
12 percent per year during the extension period.
Under this bill, interest on unpaid individual income or corporate income or
franchise tax, or interest that would otherwise be due for an underpayment of
estimated taxes, does not apply if the taxpayer is allowed an extension due to disaster
or terror. The bill also allows, for good cause, an extension of time to deposit
withholding tax. In addition, the bill exempts from interest a late payment of
withholding tax from a pass-through entity if the taxpayer is allowed an extension
due to disaster or terror.
Under current law, the itemized deductions credit is calculated as 5 percent of
the difference between the sum of certain amounts that are allowed as itemized
deductions under the IRC and the standard deduction. Some deductions allowed
under the IRC, such as casualty and theft deductions and miscellaneous deductions,
are not allowed in the calculation of the itemized deductions credit. Under this bill,
a casualty loss that is directly related to a presidentially-declared disaster may be
used in the computation of the itemized deductions credit.
Under current law, partnerships, limited liability companies, tax-option
corporations, estates, and trusts (pass-through entities) must pay withholding tax
on Wisconsin income allocated to nonresident partners, members, shareholders, or
beneficiaries. The tax is due in a single annual payment. Under this bill, a
pass-through entity pays the withholding tax on the income allocated to nonresident
partners, members, shareholders, or beneficiaries in four quarterly installments.
Under current law, if a corporation that must file a state income or franchise
tax return is affiliated with any other corporation, DOR may require that the
corporation submit a consolidated statement so that DOR may determine the taxable
income received by any affiliated corporation. Under this bill, DOR may also require
a corporation to submit a consolidated statement in order for DOR to determine
whether the corporation and any affiliated corporation are a unitary business.
Under current law, a corporation that does not file its income or franchise tax
return by the due date is subject to a $30 penalty. If any other taxpayer fails to file
an income or franchise tax return by its due date, the taxpayer is subject to the
following penalties:
1. Two dollars, if the taxpayer's income tax is less than $10.
2. Three dollars, if the taxpayer's income tax is $10 or more, but less than $20.
3. Five dollars, if the taxpayer's income tax is $20 or more.
Under current law, however, a taxpayer that is not a corporation is subject to
a $30 penalty for a return that is at least 60 days late, regardless of the amount of
the taxpayer's income tax.
Under this bill, any taxpayer who does not file an income or franchise tax return
by the due date is subject to a $50 penalty. The bill also provides that fiduciaries,
partnerships, and tax-option corporations must provide schedules to their
beneficiaries, partners, and shareholders that specify the income, deductions,
credits, and other items related to the tax liability of the beneficiary, partner, or
shareholder. Any fiduciary, partnership, or tax-option corporation that fails to
provide the schedule is subject to a $50 penalty.
Under current law, a person may claim an income and franchise tax credit for
25 percent of the amount the person paid in the taxable year to install or retrofit
pumps that dispense motor vehicle fuel consisting of at least 85 percent ethanol or
at least 20 percent biodiesel fuel. This bill modifies the credit so that taxpayers may
claim the credit against the alternative minimum tax and so that corporations may
compute the credit, with other credits, in the same order as insurance companies.
Under current law, a health care provider may claim an income and franchise
tax credit for 50 percent of the amount the provider paid in the taxable year for
information technology hardware or software that is used to maintain medical
records in electronic form. This bill allows a taxpayer to claim the credit against the
alternative minimum tax.
Under current law, a business located in a technology zone may claim an income
and franchise tax credit, in an amount certified by the Department of Commerce,
based on the amount of real and personal property taxes, capital investments, and
wages the business paid in the taxable year. Under current law, all entities, except
insurance companies, must include the amount of the credit in their income
calculation, for income and franchise tax purposes. This bill requires insurance
companies to include technology zone credits in their income calculations.
Property taxation
Under current law, the total amount of the school levy and lottery and gaming
property tax credits is distributed to counties, which distribute the amounts to the
municipalities located in the counties. A municipality, however, may receive its
share of the school levy and lottery and gaming credits directly from the state if the
total amount of such credits due to the municipality is at least $3,000,000 or if the
municipality allows the payment of property taxes in three or more installments.
Under current law, the total amount of the first dollar property tax credit is
distributed to the municipalities. The first dollar credit is applied then to every
parcel of real property with improvements located in a municipality.
Under this bill, the first dollar credit is distributed to counties, which distribute
the amounts that they receive to the municipalities located in the counties. A
municipality, however, may receive its share of the first dollar credit directly from the
state if the total amount of that credit plus the school levy and lottery and gaming
credits due to the municipality is at least $3,000,000 or if the municipality allows the
payment of property taxes in three or more installments.
Under current law, if a person pays property taxes in installments and is
eligible to receive a lottery and gaming property tax credit, the amount of the credit
is applied to the amount of the first installment. Under this bill, if a person pays
property taxes in installments and is eligible to receive a first dollar property tax
credit, the amount of the credit is applied to the amount of the first installment.
This bill creates a property tax exemption for machinery and other tangible
personal property used for qualified research by persons engaged primarily in
manufacturing or biotechnology in this state.
Under current law, computers are exempt from the property tax. The state,
however, compensates the taxing jurisdictions in which tax-exempt computers are
located for the property taxes that the jurisdictions would otherwise have collected.
Under this bill, the state compensates the taxing jurisdictions in which tax-exempt
research property is located for the property taxes that the jurisdictions would
otherwise have collected.
Under current law, DOR monitors the property tax assessments in all taxation
districts. If DOR determines that a major class of property in a taxation district
(property with an assessed value representing more than 5 percent of the full value
of all property in the taxation district) has not been assessed at a value that is within
10 percent of the full value of such property at least once during the most recent five
years, DOR notifies the taxation district that the assessment staff in that district
must participate in an assessment education program. Under current law, if DOR
determines that a major class of property in the taxation district has not been
assessed at a value that is within 10 percent of the full value of such property in the
year that the taxation district's assessment staff participated in an assessment
education program and in the following year, DOR must supervise the taxation
district's next property tax assessment.
Under this bill, a major class of property is property with an assessed value
representing more than 10 percent of the full value of all property in the taxation
district in which the major class of property is located. Under the bill, if DOR
determines that a major class of property in a taxation district has not been assessed
at a value that is within 10 percent of the full value of such property at least once
during the most recent five years, DOR notifies the taxation district that DOR may
supervise a subsequent taxation district assessment. If DOR determines that a
major class of property in the taxation district has not been assessed at a value that
is within 10 percent of the full value of such property in the year after the taxation
district receives such notice, DOR must supervise the taxation district's next
property tax assessment.
This bill requires DOR to collaborate with counties to create county property
tax assessment systems.
Under current law, state-owned facilities are exempt from the property tax.
Instead, the state makes payments to counties and municipalities where state
facilities are located to partially compensate the counties and municipalities for the
costs of providing services to the facilities. Under current law, DOA administers the
program to pay for county and municipal services. Under this bill, DOR administers
the program.
Other taxation
This bill imposes an assessment on a motor vehicle fuel supplier at a rate not
exceeding 3 percent of the supplier's gross receipts from the sale of motor vehicle fuel
in this state. The revenue collected is deposited into the transportation fund. The
supplier may not increase the selling price of motor vehicle fuel in order to recover
the assessment amount. Income derived from the sale in this state of biodiesel fuel
or ethanol blended with gasoline to create gasoline consisting of at least 85 percent
ethanol is not included in the supplier's gross receipts.
This bill increases the cigarette tax from $1.77 to $2.52 a pack and increases the
tobacco products tax from 50 percent to 71 percent of the manufacturer's established
list price. In addition, the bill increases the tobacco products tax rate on moist snuff
from $1.31 per ounce to $1.87 per ounce and imposes the increase on moist snuff in
inventory.
Under current law, generally, a person may not sell cigarettes in this state
without a permit from DOR. Current law also prohibits a direct marketer (anyone
who sells cigarettes to a consumer who is not present on the seller's premises) from
selling to consumers in this state unless the direct marketer fulfills certain
requirements.
Under current law, a direct marketer must certify to DOR that the person will
register with debit and credit card companies; that the invoices for all shipments of
cigarettes will bear the direct marketer's name and address; and that the direct
marketer will provide DOR any information that DOR considers necessary. The
direct marketer may not sell any cigarettes unless the sales tax, use tax, or cigarette
tax, as appropriate, has been paid.
Current law requires a direct marketer to verify the consumer's name and
address and that the consumer is at least 18 years of age. In addition, any person
who delivers cigarettes to consumers in this state must verify that the purchaser, and
the person who receives the delivery, is at least 18 years of age.
Under this bill, generally, current provisions that apply to the direct marketing
of cigarettes also apply to the direct marketing of tobacco products. In addition, no
person may sell cigarettes or tobacco products to consumers in this state unless the
person applies to DOR for a permit.
Under current law, a person may not sell cigarettes or tobacco products to
consumers in this state unless the person obtains a license from each municipality
in which the person intends to sell cigarettes or tobacco products. Under the bill, no
municipality may issue a license to any person who has an arrest or conviction record
related to selling cigarettes or tobacco products but a direct marketer who holds a
valid permit to sell cigarettes or tobacco products to consumers in this state is not
required to obtain a license from each municipality in which the cigarettes or tobacco
products are sold.
Under current law, a municipality or county that is located in a premier resort
area may impose a sales tax of 0.5 percent on gross receipts from the sale of tangible
personal property and taxable services sold at certain businesses, as classified under
the federal Standard Industrial Classification Manual.
This bill allows a municipality or county that imposed the premier resort area
tax prior to January 1, 2000, to increase the tax rate to 1 percent. In addition, a
number of businesses are added to the list of businesses in which sales are subject
to the tax.
This bill creates a sales and use tax exemption for machinery and other tangible
personal property used for qualified research by persons engaged primarily in
manufacturing or biotechnology in this state.
This bill provides that, for sales and use tax purposes, taxable sales do not
include the sale of tickets or admissions by a nonprofit organization to participate
in any sports activity in which more than 50 percent of the participants are younger
than 20.
Under current law, DOR may enter into agreements with American Indian
tribes or bands in this state to refund, generally, the cigarette and tobacco product
taxes imposed on sales of cigarettes and tobacco products on land that was
designated a reservation or trust land on or before January 1, 1983. Under this bill,
DOR may provide tax refunds for cigarettes and tobacco products sold on land
designated a reservation or trust land on or before January 1, 1983, or on a later date
determined by an agreement between DOR and the tribal council.
The bill also allows DOR to enter into agreements with American Indian tribes
or bands in this state to collect, remit, and provide refunds of income, withholding,
sales and use, motor vehicle fuel, and beverage taxes related to activities on tribal
lands or undertaken by tribal members outside of tribal lands.
Under current law, a state agency may certify to DOR a debt owed to the agency
so that DOR can collect the debt from the debtor's state tax refund. Certifiable debts
include an amount that has been reduced to a judgment or an amount for which the
agency has provided the debtor reasonable notice and an opportunity to be heard.
Under current law, DOR charges the debtor for administrative expenses related to
offsetting the debt.
This bill generally requires a state agency to enter into a written agreement
with DOR to collect any amount owed to the agency that is more than 90 days past
due, unless negotiations with the debtor are actively ongoing, the debt is the subject
of legal or administrative proceedings, or the debtor is adhering to an acceptable
payment arrangement. Under the agreement, DOR, rather than the agency, may
provide the debtor reasonable notice and an opportunity to be heard with regard to
the debt. Also, DOR may collect the debt directly from the debtor in addition to
offsetting a state tax refund. Under the bill, DOR charges the debtor for
administrative expenses related to collecting the debt.
This bill requires financial institutions to provide DOR with information about
account holders so that DOR can determine if any of those persons owe the state
delinquent debts. Current law permits DOR to levy on financial institutions to
collect delinquent debts from the accounts of debtors.
Under this bill, DOR may enter into agreements with the IRS to collect a
person's federal nontax debt by subtracting the amount from any state payment to
that person, other than a tax refund. DOR may also charge a collection fee up to $25
per transaction. In addition, DOR may enter into agreements with the IRS to collect
a person's state tax or nontax debt by subtracting the amount from any federal
payment to that person, as authorized by federal law.
Under this bill, for sales and use tax purposes, a retailer engaged in business
in this state includes any person who has an affiliate in this state, if the person is
related to the affiliate for federal tax purposes and if the affiliate uses facilities or
employees in this state to establish a market for sales of items by the related person
to purchasers in this state or for providing services to the related person's purchasers
in this state.
Under this bill, for purposes of reviewing DOR's rules, the Tax Appeals
Commission must give controlling weight to DOR's interpretation of its rules unless
the interpretation is plainly erroneous or inconsistent with the language of the rules
or the statutes that govern the rules.
Under current law, generally, the sale of tangible personal property that
becomes an ingredient or component part of an article of tangible personal property,
or is consumed, destroyed, or loses its identity in manufacturing an article of tangible
personal property is exempt from the sales and use tax. This bill provides that the
sale of such tangible personal property is exempt from the sales and use tax only if
it is also used exclusively and directly in manufacturing an article of tangible
personal property.
Under current law, for sales and use tax purposes, "manufacturing" is the
production by machinery of a new article of tangible personal property with a
different form, use, and name from existing materials, by a process popularly
regarded as manufacturing. This bill provides that production begins with
conveying raw materials and supplies from plant inventory to the place where work
is performed in the same plant and ends with conveying finished units of tangible
personal property to the point of first storage in the same plant.
Under current law, for sales and use tax purposes, "manufacturing" includes
crushing, washing, grading, and blending sand, rock, gravel, and other minerals and
ore dressing. Under this bill, "manufacturing" also includes conveying work in
progress directly from one manufacturing process to another in the same plant;
testing or inspecting the new article of tangible personal property that is being
manufactured; storing work in progress in the same plant where the manufacturing
occurs; assembling finished units of tangible personal property; and packaging a new
article of tangible personal property, if the manufacturer, or another person on the
manufacturer's behalf, performs the packaging and if the packaging becomes part
of the new article of tangible personal property as it is customarily offered for sale
by the manufacturer.
The sales and use tax is currently imposed on the towing of tangible personal
property, unless at the time of towing the sale of the tangible personal property in
this state would be exempt from the sales and use tax, not including the exempt sale
of a motor vehicle to a nonresident and certain other nontaxable sales. This bill
specifies that the sales and use tax is imposed on the towing and hauling of motor
vehicles by a tow truck, unless at the time of towing or hauling a sale of the motor
vehicle in this state would be exempt from the sales and use tax, not including the
exempt sale of a motor vehicle to a nonresident and certain other nontaxable sales.
Under current law, if the IRS requires taxpayers to electronically file
information returns or wage statements for federal income tax purposes, the
taxpayer must electronically file, with DOR, information or wage statements for
state income or franchise tax purposes.
Under this bill, if DOR requires a person to file 50 or more of any one type of
information return or 50 or more wage statements, the returns or statements must
be filed electronically.
The bill also requires a person who must file a return related to collecting the
state rental vehicle fee or dry cleaning fee to file the return in the manner prescribed
by DOR.
Under current law, DOR may require a person to produce documents related
to any matter that DOR has authority to investigate or for which DOR must make
a determination. This bill provides that a person who fails to provide documents to
DOR that support information shown on any income or franchise tax return or any
sales and use tax return is subject to the disallowance of deductions, credits, or
exemptions to which the requested documents relate.
Under current law, for sales and use tax purposes, a person in this state who
sells tangible personal property or services must have a valid seller's permit from
DOR. This bill requires DOR to post a list of every person who has had a seller's
permit revoked on an Internet site created and maintained by DOR.
transportation
Highways
Under current law, the Building Commission may issue revenue bonds for
major highway projects and transportation administrative facilities in a principal
amount that may not exceed $2,708,341,000. This bill increases the revenue bond
limit from $2,708,341,000 to $3,009,784,200.
This bill increases from $303,300,000 to $553,550,000 the general obligation
bonding limit for DOT's funding of two southeast Wisconsin freeway rehabilitation
projects: the Marquette interchange reconstruction project and the I 94 north-south
corridor reconstruction project. The bill also expands the project boundaries of
another southeast Wisconsin freeway rehabilitation project, the Zoo interchange
reconstruction project.
Under current law, with limited exceptions, all highway improvement
construction projects undertaken by DOT must be let by contract based upon
competitive bidding. This bill allows DOT, for two years after the bill's effective date,
to enter into highway improvement contracts utilizing a design-build procurement
process if DOT finds that it would be more feasible and advantageous and if certain
conditions are met. A design-build procurement process is calculating a method
under which a project's engineering, design, and construction services are provided
by a single private entity or consortium selected as part of a single bidding process.
Drivers and motor vehicles
Current law requires the use of seat belts, child safety seats, and booster seats
in certain motor vehicles but prohibits a law enforcement officer from stopping or
inspecting a motor vehicle solely to determine compliance with these requirements.
An officer may, however, issue a citation for a seat belt use violation observed in the
course of a stop or inspection made for other purposes.
