January 2014 Special Session
2013 - 2014 LEGISLATURE
February 13, 2014 - Printed by direction of Senate Chief Clerk.
1An Act to repeal
38.16 (3) (b); to renumber
71.05 (8) (b), 71.10 (4) (cr), 71.10 2
(4) (dr) and 71.10 (4) (er); to amend
38.16 (title), 38.16 (3) (a) 2., 38.16 (3) (be), 3
38.16 (3) (bg) 2., 38.16 (3) (br) 1., 38.16 (3) (br) 2., 38.16 (3) (c) (intro.), 38.16 (3) 4
(c) 1., 38.16 (3) (c) 3., 38.16 (3) (c) 4., 38.16 (3) (d), 71.05 (6) (b) 47. am., 71.05 (6) 5
(b) 47. b., 71.05 (6) (b) 47. c., 71.06 (1q) (a), 71.06 (2) (i) 1., 71.06 (2) (j) 1., 71.07 6
(4k) (b) 1., 71.07 (5m) (a) 4., 71.07 (5n) (b) (intro.), 71.07 (9r) (a), 71.08 (1) (intro.), 7
71.08 (1) (intro.), 71.26 (4) (a), 71.28 (9s) (d) 3., 71.45 (4) (a), 71.47 (9s) (d) 3., 8
71.52 (6), 71.98 (3), 77.54 (61) (intro.), (a) and (b) and 238.16 (3) (intro.); and to
20.292 (1) (dp), 38.16 (3) (a) 1m., 38.16 (3) (a) 2w., 38.16 (4), 71.05 (6) (b) 10
47. dm., 71.05 (8) (b) 2., 71.05 (8) (c), 71.07 (5i) (c) 3., 71.28 (5i) (c) 3., 71.47 (5i) 11
(c) 3., 77.54 (9d) and 77.54 (61) (c) of the statutes; relating to: reducing the
12lowest individual income tax rate; providing technical college property tax
13relief aid; establishing a technical college district revenue limit; the carry-back
14of net operating losses; a sales and use tax exemption for building materials
1that become a part of certain facilities; the sales and use tax exemption for
2commercial printing; the jobs tax credit; the electronic medical records credit;
3the manufacturing and agriculture credit; the research credit; the state historic
4rehabilitation credit; the relocated business credit; and making an
Analysis by the Legislative Reference Bureau
The text of Engrossed January 2014 Special Session Assembly Bill 1 consists
of the following documents adopted in the assembly on February 11, 2014: the bill
as affected by Assembly Amendments 2, 3, and 4 and Assembly Amendment 1 to
Assembly Amendment 4.
Content of Engrossed January 2014 Special Session Assembly Bill 1:
Individual Income tax rates
Under current law, there are four income tax brackets for single individuals,
certain fiduciaries, heads of households, and married persons. The brackets are
indexed for inflation. The rate of taxation under current law for the lowest bracket
for single individuals, certain fiduciaries, heads of households, and married persons
is 4.40 percent of taxable income; the rate for the second bracket is 5.84 percent; the
rate for the third bracket is 6.27 percent; and the rate for the highest bracket is 7.65
percent. Before applying bracket indexing, the four brackets for individuals, certain
fiduciaries, and heads of households, to which the above rates apply, are as follows:
taxable income from $0 to $7,500; taxable income exceeding $7,500 but not exceeding
$15,000; taxable income exceeding $15,000 but not exceeding $225,000; and taxable
income exceeding $225,000.
This rate and bracket structure first applies to taxable year 2013, and was
enacted in 2013 Wisconsin Act 20
, the state budget bill.
For taxable years beginning after December 31, 2013, this bill lowers the rate
of taxation for the lowest tax bracket. Under the bill, the rate of taxation for the
lowest bracket for single individuals, certain fiduciaries, heads of households, and
married persons is 4.0 percent of taxable income.
technical college system
This bill provides property tax relief aid to technical college districts,
distributed annually to each district on the basis of its equalized value as compared
to the equalized value of all technical college districts as of January 2014. The first
distribution is in February 2015.
The bill eliminates the current limit on a technical college district's tax levy and
imposes, instead, a revenue limit. Under the bill, with certain exceptions, a district
board's revenue (defined as the sum of its tax levy for operations and the amount of
property tax relief aid it receives) in the 2014-15 school year or any school year
thereafter may not exceed its revenue in the previous school year increased by the
district's valuation factor, which is the percentage change in the district's equalized
value due to new construction, less improvements removed.
net operating losses
Under current law, for income tax purposes, under certain circumstances, a
taxpayer may claim a Wisconsin net operating loss against Wisconsin taxable income
of the two years preceding the year in which the taxpayer sustained the loss. This
bill clarifies that a taxpayer need not make an offset against Wisconsin modified
taxable income of the two years preceding the loss, if the taxpayer chooses not to
carry back the net operating loss to the two years preceding the loss.
Under current law, corporations and insurers may offset against their
Wisconsin net business income any Wisconsin net business loss sustained in any of
the 15 preceding taxable years. Under the bill, corporations and insurers may offset
against their Wisconsin net business income any Wisconsin net business loss
sustained in any of the 20 preceding taxable years.
Under current law, the provisions of the federal Internal Revenue Code used for
computing depreciation, depletion, and amortization for state income and franchise
tax purposes are the provisions of the federal Internal Revenue Code in effect on
January 1, 2014. Under the bill, the provisions of the federal Internal Revenue Code
used for computing depletion are the provisions of the federal Internal Revenue Code
in effect for the year in which the property is placed in service.
Under current law, municipalities, school districts, and certain nonprofit
organizations are exempt from paying the sales tax and the use tax on purchases of
tangible personal property. To receive the sales tax or use tax exemption, the
municipality, school district, or nonprofit organization must purchase the tangible
personal property. A construction contractor hired by the municipality, school
district, or nonprofit organization may not receive the exemption for property
purchased by the contractor to be used for a municipality, school district, or nonprofit
organization construction project.
Under this bill, the sale of tangible personal property that becomes a component
of a facility in this state that is owned by a municipality or nonprofit organization is
exempt from the sales tax and the use tax. The exemption applies to tangible
personal property purchased by a construction contractor who transfers the property
to the municipality or nonprofit organization as part of constructing the facility.
Under current law, a person may claim the jobs tax credit if the Wisconsin
Economic Development Corporation certifies the person to receive the tax credit, the
person increases net employment in the person's business, and the person provides
certain wages or job training to its full-time employees. This bill specifies that to be
eligible for the jobs tax credit a person must increase net employment in the person's
business in this state. Therefore, under the bill, a person may qualify for the jobs tax
credit by relocating existing jobs to this state even if the number of individuals the
person's business employs nationwide does not increase. Similarly, under the bill,
a person does not qualify for the jobs tax credit by increasing the number of
individuals the person's business employs nationwide if the number of individuals
the person's business employs in this state does not increase.
Under current law, for income and franchise tax purposes, a taxpayer may not
claim a relocated business deduction or tax credit for taxable years beginning after
December 31, 2013. Under this bill, a taxpayer who is first eligible to claim a
relocated business deduction or tax credit for a taxable year beginning after
December 31, 2012, and before January 1, 2014, may claim the deduction or credit
in the following taxable year.
The bill also provides that the manufacturing and agriculture credit, the
research credit, and the state historic rehabilitation credit may be claimed against
the alternative minimum tax.
Finally, the bill makes technical changes to the electronic medical records tax
credit and to the sales and use tax exemption for tangible personal property used in
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
20.292 (1) (dp) of the statutes is created to read:
(dp) Property tax relief aid.
A sum sufficient equal to the amount 3
necessary to distribute the property tax relief aid to technical college districts under 4
s. 38.16 (4).
38.16 (title) of the statutes is amended to read:
(title) District tax levy; revenue limit; property tax relief aid.
38.16 (3) (a) 1m. of the statutes is created to read:
38.16 (3) (a) 1m. "Equalized value" excludes the value of tax incremental 9
(a) 2. "Excess levy
" means the amount by which a district 13
board's tax levy revenue
exceeds the limit under this subsection.
38.16 (3) (a) 2w. of the statutes is created to read:
(a) 2w. "Revenue" means the sum of the tax levy and property tax 3
relief aid under sub. (4).
(be) Notwithstanding sub. (1), no district board may increase its tax
in 2013 the 2014-15 school year
or in any school
year thereafter by a 9
percentage that exceeds the district's valuation factor, except as provided in pars. 10
(bg) and (br).
(bg) 2. If a district board's allowable
under this 14
subsection in 2013 the 2014-15 school year
, or any school
year thereafter, is greater 15
than its actual levy revenue
in that school
year, the limit otherwise applicable to the 16
district board under this subsection in the succeeding school
year is increased by the 17
difference between the prior school
and the prior school 18
year's actual levy revenue
, as determined by the department of revenue, up to a 19
maximum increase of 0.5 percent of the actual levy
in that prior school
if the district board approves the increase by a three-fourths vote.
(br) 1. If a district board wishes to exceed the limit otherwise 24
applicable to the district under this subsection, it shall adopt a resolution supporting 25
inclusion in the final district budget of an amount equal to the proposed excess levy
. The resolution shall be filed as provided in s. 8.37. Within 10 days after 2
adopting the resolution, the district board shall notify the board of the scheduled date 3
of the referendum and submit a copy of the resolution to the board. The district board 4
shall call a special referendum for the purpose of submitting the resolution to the 5
electors of the district for approval or rejection. In lieu of a special referendum, the 6
district board may specify that the referendum be held at the next succeeding spring 7
primary or election or partisan primary or general election, if such election is to be 8
held not sooner than 70 days after the filing of the resolution of the district board. 9
The district board shall certify the results of the referendum to the board within 10 10
days after the referendum is held.
38.16 (3) (br) 2. of the statutes is amended to read: