AB595: Bill Text

LRB-3914/1

JK:ahe&wlj

2015 - 2016 LEGISLATURE

2015 Assembly BILL 595

December 10, 2015 - Introduced by Representatives Novak, Ballweg, E. Brooks, Horlacher, Katsma, Knodl, Loudenbeck, Murphy and Macco, cosponsored by Senators Marklein and Gudex. Referred to Committee on Ways and Means.

AB595,2,3 An Act to repeal 76.02 (7) and subchapter V of chapter 76 [precedes 76.90]; to renumber and amend 71.05 (6) (b) 50., 71.26 (3) (ym), 71.34 (1k) (n) and 71.45 (2) (a) 19.; to amend 20.913 (1) (b), 71.04 (4) (intro.), 71.04 (8) (c), 71.13 (2) (a) 3., 71.13 (2) (b), 71.17 (3) (intro.), 71.25 (6) (intro.), 71.25 (10) (c), 71.26 (2) (b) 10. d., 71.26 (3) (f), 71.63 (3) (c), 71.78 (1), 71.78 (2), 71.78 (4) (o), 73.01 (4) (a), 73.01 (5) (a), 73.03 (50) (d), 73.09 (2), 73.09 (4) (b), 73.09 (7) (a), 74.23 (1) (a) 2., 74.25 (1) (a) 2., 74.25 (1) (a) 3., 74.30 (1) (b), 74.30 (1) (c), 76.01, 76.02 (2), 76.04 (1), 76.07 (1), 76.07 (2), 76.13 (1), 77.255, 77.52 (7), 77.54 (61) (intro.), 77.59 (3), 77.59 (4), 77.61 (11), 77.65 (2) (g), 77.71 (2), 77.71 (4), 78.80 (3), 139.11 (4) (a), 139.11 (4) (b) (intro.), 139.38 (6), 139.82 (6) and 227.03 (1); and to create 71.01 (6) (j) 3. g., 71.01 (6) (j) 3. h., 71.05 (6) (b) 50. b., 71.22 (4) (j) 3. g., 71.22 (4) (j) 3. h., 71.22 (4m) (j) 3. g., 71.22 (4m) (j) 3. h., 71.26 (3) (ym) 2., 71.34 (1g) (j) 3. g., 71.34 (1g) (j) 3. h., 71.34 (1k) (n) 2., 71.42 (2) (j) 3. g., 71.42 (2) (j) 3. h., 71.45 (2) (a) 19. b., 71.78 (4) (t), 76.30 (2) (j), 77.61 (5) (b) 13., 77.71 (5), 77.73 (2m), 78.005 (13d), 78.39 (5f), 78.55 (5p), 78.64 (4), 139.01 (5p), 139.30 (8p), 139.75 (5p) and 168.01 (2s) of the statutes; relating to: tax administration technical changes.

Analysis by the Legislative Reference Bureau

This bill makes technical changes to current law regarding tax administration, including all of the following:

1. The bill provides a definition for "person" for purposes of administering petroleum products inspections and the taxes imposed on motor vehicle fuel, alternate fuel, general aviation fuel, beverages, cigarettes, and tobacco products. The bill defines "person" to include any individual, sole proprietorship, partnership, limited liability company, corporation, or association. In addition, the bill specifies that a single-owner entity that is disregarded as a separate entity for income tax purposes is disregarded as a separate entity for purposes of administering the petroleum products inspections and the various taxes.

2. The bill allows a local assessor to receive information from the Department of Revenue (DOR) regarding utility property located in a taxing jurisdiction so that the assessor may determine whether the property is subject to the state imposed license fees or to local property taxes.

3. The bill removes obsolete references to the transitional adjustment fee, the gift tax, the woodland tax, and the license fees imposed on sleeping car companies and express companies.

4. The bill eliminates the requirement that a person who receives a conveyance of real property upon the death of the property owner file a real estate transfer fee return. Current law exempts such a conveyance from the real estate transfer fee.

5. The bill allows a person who has a material interest in a property to examine a tax warrant issued for that property in order to obtain the outstanding liability secured by the tax warrant.

6. The bill makes technical changes to county and special district sales and use taxes imposed on the lease or rental of motor vehicles, boats, recreational vehicles, and aircraft in order to comply with provisions of the multistate Streamlined Sales and Use Tax Agreement.

7. The bill allows the secretary of DOR to revoke or suspend an assessor's certification and to require an assessor to take corrective action in order to avoid the revocation or suspension of his or her certification. The bill also requires that an assessor whose certification has expired may be recertified if the assessor has attended at least four of the previous five annual assessor meetings called by DOR and has fulfilled all of the continuing education requirements determined by the department. In addition, DOR may revoke an assessor's certification if the assessor fails to attend more than one annual meeting or fails to meet all of the continuing education requirements.

8. The bill adopts, for state income tax purposes, changes made to the federal Internal Revenue Code that allow an income exclusion for amounts paid by the federal Department of Justice for survivor's or disability benefits for injuries sustained in the line of duty and penalty-free withdrawals from government retirement plans by federal law enforcement officers, firefighters, and air traffic controllers who are over the age of 50.

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:

AB595,1 Section 1. 20.913 (1) (b) of the statutes is amended to read:

AB595,3,5 20.913 (1) (b) Excess tax payments. Taxes collected in excess of lawful taxation, when claims therefor have been established as provided in ss. 71.30 (4), 71.74 (13), 71.75, 71.89 (1), 72.24, 74.35, 74.37, 76.13 (3), 76.39, 76.84, 76.91, 78.19, 78.20, 78.68 (10), 78.75, 78.80 (1m), 139.092, 139.25 (1), 139.36, 139.365 and 139.39 (4).

AB595,2 Section 2. 71.01 (6) (j) 3. g. of the statutes is created to read:

AB595,3,7 71.01 (6) (j) 3. g. P.L. 114-14.

AB595,3 Section 3. 71.01 (6) (j) 3. h. of the statutes is created to read:

AB595,3,9 71.01 (6) (j) 3. h. P.L. 114-26.

AB595,4 Section 4. 71.04 (4) (intro.) of the statutes is amended to read:

AB595,4,9 71.04 (4) Nonresident allocation and apportionment formula. (intro.) Nonresident individuals and nonresident estates and trusts engaged in business within and without the state shall be taxed only on such income as is derived from business transacted and property located within the state. The amount of such income attributable to Wisconsin may be determined by an allocation and separate accounting thereof, when the business of such nonresident individual or nonresident estate or trust within the state is not an integral part of a unitary business, but the department of revenue may permit an allocation and separate accounting in any case in which it is satisfied that the use of such method will properly reflect the income taxable by this state. In all cases in which allocation and separate accounting is not permissible, the determination shall be made in the following manner: for all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, sleeping car companies and car line companies there shall first be deducted from the total net income of the taxpayer the part thereof (less related expenses, if any) that follows the situs of the property or the residence of the recipient. The remaining net income shall be apportioned to this state by use of the following:

AB595,5 Section 5. 71.04 (8) (c) of the statutes is amended to read:

AB595,4,16 71.04 (8) (c) The net business income of railroads, sleeping car companies, car line companies, pipeline companies, financial organizations, telecommunications companies, air carriers, and public utilities requiring apportionment shall be apportioned pursuant to rules of the department of revenue, but the income taxed is limited to the income derived from business transacted and property located within the state.

AB595,6 Section 6. 71.05 (6) (b) 50. of the statutes is renumbered 71.05 (6) (b) 50. a. and amended to read:

AB595,4,25 71.05 (6) (b) 50. a. Starting Except as provided in subd. 50. b., starting with the first taxable year beginning after December 31, 2013, and for each of the next 4 taxable years, 20 percent of the amount determined by subtracting the combined federal adjusted basis of all depreciated or amortized assets as of the last day of the taxable year beginning in 2013 that are also being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted basis of those assets on the same day.

AB595,7 Section 7. 71.05 (6) (b) 50. b. of the statutes is created to read:

AB595,5,6 71.05 (6) (b) 50. b. If any taxable year for which the modification under subd. 50. a. is required is a fractional year under s. 71.03 (3), the difference between the modification allowed for the fractional year and the modification allowed for the 12-month taxable year shall be a modification for the first taxable year beginning after December 31, 2018.

AB595,8 Section 8. 71.13 (2) (a) 3. of the statutes is amended to read:

AB595,5,9 71.13 (2) (a) 3. Gift tax returns or reports, sales Sales and use tax returns, and withholding returns or reports that were required to be filed, if not previously filed.

AB595,9 Section 9. 71.13 (2) (b) of the statutes is amended to read:

AB595,5,24 71.13 (2) (b) Upon receipt of the returns described in par. (a), the department shall immediately determine the amount of taxes including interest, penalties, and costs to be payable, as well as any delinquent income, withholding, sales, and use, and gift taxes, penalties, interest, and costs due, and shall certify those amounts to the court. The court shall then enter an order directing the personal representative or trustee to pay the amounts found to be due by the department and take the department's receipt for the amount paid. The receipt shall be evidence of the payment and shall be filed with the court before a final distribution of the estate or trust is ordered and the personal representative or trustee is discharged. The filing of the receipt shall in no manner affect the obligation of the personal representative or trustee to file income, sales, and withholding returns covering transactions reportable during the final taxable year of the estate or trust and to pay income, sales, use and withholding taxes, penalties, interest, and costs due as the result of such transactions.

AB595,10 Section 10. 71.17 (3) (intro.) of the statutes is amended to read:

AB595,6,6 71.17 (3) Liability for payment of taxes due from decedent. (intro.) Any income, withholding, sales, or use, or gift taxes, penalties, interest, and costs found to be due from a decedent, an estate, or a trust for any of the years open to assessment under s. 71.77 and any delinquent income, withholding, sales, or use, or gift taxes, penalties, interest, and costs found to be due shall be assessed against and paid by one of the following:

AB595,11 Section 11. 71.22 (4) (j) 3. g. of the statutes is created to read:

AB595,6,8 71.22 (4) (j) 3. g. P.L. 114-14.

AB595,12 Section 12. 71.22 (4) (j) 3. h. of the statutes is created to read:

AB595,6,10 71.22 (4) (j) 3. h. P.L. 114-26.

AB595,13 Section 13. 71.22 (4m) (j) 3. g. of the statutes is created to read:

AB595,6,12 71.22 (4m) (j) 3. g. P.L. 114-14.

AB595,14 Section 14. 71.22 (4m) (j) 3. h. of the statutes is created to read:

AB595,6,14 71.22 (4m) (j) 3. h. P.L. 114-26.

AB595,15 Section 15. 71.25 (6) (intro.) of the statutes is amended to read:

AB595,7,7 71.25 (6) Allocation and separate accounting and apportionment formula. (intro.) Corporations engaged in business within and without the state shall be taxed only on such income as is derived from business transacted and property located within the state. The amount of such income attributable to Wisconsin may be determined by an allocation and separate accounting thereof, when the business of such corporation within the state is not an integral part of a unitary business, but the department of revenue may permit an allocation and separate accounting in any case in which it is satisfied that the use of such method will properly reflect the income taxable by this state. In all cases in which allocation and separate accounting is not permissible, the determination shall be made in the following manner: for all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, sleeping car companies, car line companies and corporations or associations that are subject to a tax on unrelated business income under s. 71.26 (1) (a) there shall first be deducted from the total net income of the taxpayer the part thereof (less related expenses, if any) that follows the situs of the property or the residence of the recipient. The remaining net income shall be apportioned to this state by use of the following:

AB595,16 Section 16. 71.25 (10) (c) of the statutes is amended to read:

AB595,7,14 71.25 (10) (c) The net business income of railroads, sleeping car companies, car line companies, pipeline companies, financial organizations, telecommunications companies, air carriers, and public utilities requiring apportionment shall be apportioned pursuant to rules of the department of revenue, but the income taxed is limited to the income derived from business transacted and property located within the state.

AB595,17 Section 17. 71.26 (2) (b) 10. d. of the statutes, as created by 2015 Wisconsin Act 55, is amended to read:

AB595,7,22 71.26 (2) (b) 10. d. For purposes of subd. 10. a., "Internal Revenue Code" does not include amendments to the federal Internal Revenue Code enacted after December 31, 2013, except that "Internal Revenue Code" includes the provisions of P.L. 113-97, P.L. 113-159, P.L. 113-168, section 302901 of P.L. 113-287, sections 171, 172, and 201 to 221 of P.L. 113-295, and sections 102, 105, and 207 of division B of P.L. 113-295, P.L. 114-14, and P.L. 114-26.

AB595,18 Section 18. 71.26 (3) (f) of the statutes is amended to read:

AB595,8,2 71.26 (3) (f) Section 164 (a) is modified so that foreign taxes are not deductible unless the income on which the tax is based is taxable under this chapter and so that gross receipts taxes assessed in lieu of property taxes, the license fee under s. 76.28 and the taxes under ss. 70.375, and 76.81 and 76.91 are deductible.

AB595,19 Section 19. 71.26 (3) (ym) of the statutes is renumbered 71.26 (3) (ym) 1. and amended to read:

AB595,8,11 71.26 (3) (ym) 1. Starting Except as provided in subd. 2., starting with the first taxable year beginning after December 31, 2013, and for each of the next 4 taxable years, a corporation shall subtract 20 percent of the amount determined by subtracting the combined federal adjusted basis of all depreciated or amortized assets as of the last day of the taxable year beginning in 2013 that are also being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted basis of those assets on the same day.

AB595,20 Section 20. 71.26 (3) (ym) 2. of the statutes is created to read:

AB595,8,17 71.26 (3) (ym) 2. If any taxable year for which the modification under subd. 1. is required is a fractional year under s. 71.24 (6) (c), the difference between the modification allowed for the fractional year and the modification allowed for the 12-month taxable year shall be a modification for the first taxable year beginning after December 31, 2018.

AB595,21 Section 21. 71.34 (1g) (j) 3. g. of the statutes is created to read:

AB595,8,19 71.34 (1g) (j) 3. g. P.L. 114-14.

AB595,22 Section 22. 71.34 (1g) (j) 3. h. of the statutes is created to read:

AB595,8,21 71.34 (1g) (j) 3. h. P.L. 114-26.

AB595,23 Section 23. 71.34 (1k) (n) of the statutes is renumbered 71.34 (1k) (n) 1. and amended to read:

AB595,9,5 71.34 (1k) (n) 1. Starting Except as provided in subd. 2., starting with the first taxable year beginning after December 31, 2013, and for each of the next 4 taxable years, a subtraction shall be made in an amount equal to 20 percent of the amount determined by subtracting the combined federal adjusted basis of all depreciated or amortized assets as of the last day of the taxable year beginning in 2013 that are also being depreciated or amortized for Wisconsin from the combined Wisconsin adjusted basis of those assets on the same day.

AB595,24 Section 24. 71.34 (1k) (n) 2. of the statutes is created to read: