LRB-2339/1
MES&KRP:jld&wlj
2017 - 2018 LEGISLATURE
April 5, 2017 - Introduced by Representatives C. Taylor, Subeck, Riemer, Crowley,
Sargent, Zamarripa, Hebl, Considine, Berceau, Anderson, Stuck, Goyke,
Brostoff, Sinicki, Pope, Kolste and Ohnstad, cosponsored by Senators
Wirch, Johnson and Risser. Referred to Committee on Ways and Means.
AB200,1,8 1An Act to amend 71.05 (23) (b) 1., 71.06 (1q) (intro.), 71.06 (2) (i) (intro.), 71.06
2(2) (j) (intro.), 71.06 (2e) (a), 71.06 (2e) (b), 71.06 (2m), 71.06 (2s) (d), 71.125 (1),
371.125 (2), 71.17 (6), 71.64 (9) (b) (intro.), 71.67 (5) (a) and 71.67 (5m); and to
4create
71.05 (23) (be), 71.06 (1r), 71.06 (2) (k), 71.06 (2) (L), 71.06 (2e) (bg) and
571.07 (5n) (e) of the statutes; relating to: increasing certain individual income
6tax rates and expanding the number of brackets, increasing the personal
7exemption for certain individuals, and sunsetting the manufacturing and
8agriculture tax credit.
Analysis by the Legislative Reference Bureau
This bill makes changes to the individual income tax rates and brackets
structure, increases the personal exemption amount for certain taxpayers, and
sunsets the manufacturing and agriculture tax credit.
Changes to rates and brackets
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 4.0 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. In general, this rate and bracket structure first applied
to taxable year 2013 and was enacted in 2013 Wisconsin Act 20, the state's 2013
Biennial Budget Act, although the rate for the lowest bracket was 4.40 percent for
taxable year 2013 and became 4.0 percent in taxable year 2014.
Under this bill, which first applies to taxable year 2017, there are five 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
the bill for single individuals, certain fiduciaries, heads of households, and married
persons for the four lowest brackets remains the same as current law, 4.0 percent,
5.84 percent, 6.27 percent, and 7.65 percent, and the rate for the new fifth bracket
is 8.25 percent.
Before indexing for inflation, for taxable year 2017, for single individuals,
certain fiduciaries, and heads of households, the lowest bracket applies to taxable
income of over $0 up to $7,500; the second bracket applies to taxable income over
$7,500 up to $15,000; the third bracket applies to taxable income over $15,000 up to
$225,000; the fourth bracket applies to taxable income over $225,000 up to $500,000;
and the new fifth, or top bracket, applies to taxable income over $500,000. For
married joint filers, the lowest bracket applies to taxable income of over $0 up to
$10,000; the second bracket applies to taxable income over $10,000 up to $20,000; the
third bracket applies to taxable income over $20,000 up to $300,000; the fourth
bracket applies to taxable income over $300,000 up to $1,000,000; and the new fifth,
or top bracket, applies to taxable income over $1,000,000.
Personal exemptions
Under current law, an individual income tax personal exemption exists in the
amount of $700 for each taxpayer who is required to file an income tax return and
$700 for the taxpayer's spouse, except if the spouse is filing separately or as a head
of household. A taxpayer may also claim a $700 exemption for each dependent for
whom he or she is entitled to claim an exemption under the Internal Revenue Code.
In general, an additional exemption of $250 may be claimed by a taxpayer, and
spouse, who has reached the age of 65 before the close of the taxable year to which
his or her tax return relates.
This bill increases the personal exemption amount for certain taxpayers
starting with taxable year 2017. Under the bill, if a single individual has Wisconsin
adjusted gross income (WAGI) of less than $12,000, his or her personal exemption is
$8,260. The personal exemption amount for such an individual phases down to
approximately $700 as his or her WAGI increases from $12,000 to the maximum
income threshold of $60,000. If such an individual's WAGI is more than the
maximum income threshold, the individual calculates his or her exemption under
current law.

Similarly under the bill, the personal exemption amount for a head of
household and a married individual filing separately is increased to $8,260 per
person, and to $16,520 for a married couple filing jointly, for those whose WAGI, or
joint WAGI in the case of a married couple filing jointly, is less than $14,000 (head
of household), $20,000 (married joint), or $10,000 (married separate). The
exemption amount phases down to approximately $700 ($1,400 for a married couple
filing jointly) as WAGI increases to the maximum income threshold, which is $70,000
(head of household), $100,000 (married joint), or $50,000 (married separate). If a
taxpayer's WAGI is more than the maximum income threshold, the taxpayer
calculates his or her, or the couple's, exemption under current law. The bill does not
make any change to the current law exemption provisions for dependents or
individuals who are age 65 or above.
Manufacturing and agriculture credit
This bill provides that a taxpayer may not file a new claim the manufacturing
and agriculture tax credit for taxable years beginning after December 31, 2016,
although credits claimed for taxable years beginning before January 1, 2017, may be
carried forward to taxable years that begin after December 31, 2016.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
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:
AB200,1 1Section 1. 71.05 (23) (b) 1. of the statutes is amended to read:
AB200,3,62 71.05 (23) (b) 1. A personal exemption of $700 if the taxpayer is required to file
3a return under s. 71.03 (2) (a) 1. or 2. and $700 for the taxpayer's spouse, except if
4the spouse is filing separately or as a head of household. For taxable years beginning
5after December 31, 2016, the exemption under this subdivision may not be claimed
6by a taxpayer who is eligible for, and claims, the exemption under par. (be).
AB200,2 7Section 2. 71.05 (23) (be) of the statutes is created to read:
AB200,4,3
171.05 (23) (be) For taxable years beginning after December 31, 2016, a personal
2exemption calculated as follows if the taxpayer is required to file a return under s.
371.03 (2) (a) 1. or 2.:
AB200,4,114 1. For a single individual who has a Wisconsin adjusted gross income of less
5than $12,000, an exemption of $8,260. For a single individual who has a Wisconsin
6adjusted gross income of at least $12,000, the exemption is the amount obtained by
7subtracting from $8,260 15.75 percent of Wisconsin adjusted gross income in excess
8of $12,000 but not less than $0, except that if the single individual's Wisconsin
9adjusted gross income is more than $60,000, the individual may not claim the
10exemption under this paragraph but the individual may claim the exemption under
11par. (b).
AB200,4,1912 2. For a head of household who has a Wisconsin adjusted gross income of less
13than $14,000, an exemption of $8,260. For a head of household who has a Wisconsin
14adjusted gross income of at least $14,000, the exemption is the amount obtained by
15subtracting from $8,260 13.50 percent of Wisconsin adjusted gross income in excess
16of $14,000 but not less than $0, except that if the head of household's Wisconsin
17adjusted gross income is more than $70,000, the individual may not claim the
18exemption under this paragraph but the head of household may claim the exemption
19under par. (b).
AB200,5,320 3. For a married couple filing jointly that has an aggregate Wisconsin adjusted
21gross income of less than $20,000, an exemption of $16,520 for the married couple.
22For a married couple filing jointly that has an aggregate Wisconsin adjusted gross
23income of at least $20,000, the exemption is the amount obtained by subtracting, for
24the married couple, from $16,520 18.90 percent of aggregate Wisconsin adjusted
25gross income in excess of $20,000 but not less than $0, except that if the married

1couple's Wisconsin aggregate adjusted gross income is more than $100,000, the
2couple may not claim the exemption under this paragraph but the married couple
3may claim the exemption under par. (b).
AB200,5,114 4. For a married individual filing separately who has a Wisconsin adjusted
5gross income of less than $10,000, an exemption of $8,260. For a married individual
6filing separately who has a Wisconsin adjusted gross income of at least $10,000, the
7exemption is the amount obtained by subtracting from $8,260 18.90 percent of
8Wisconsin adjusted gross income in excess of $10,000 but not less than $0, except that
9if the individual's Wisconsin adjusted gross income is more than $50,000, the
10individual may not claim the exemption under this paragraph but the individual
11may claim the exemption under par. (b).
AB200,3 12Section 3. 71.06 (1q) (intro.) of the statutes is amended to read:
AB200,5,1813 71.06 (1q) Fiduciaries, single individuals, and heads of households; after
142012
to 2016. (intro.) The tax to be assessed, levied, and collected upon the taxable
15incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or
16reserve funds, and single individuals and heads of households shall be computed at
17the following rates for taxable years beginning after December 31, 2012, and before
18January 1, 2017
:
AB200,4 19Section 4. 71.06 (1r) of the statutes is created to read:
AB200,5,2420 71.06 (1r) Fiduciaries, single individuals, and heads of households; after
212016.
The tax to be assessed, levied, and collected upon the taxable incomes of all
22fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and
23single individuals and heads of households shall be computed at the following rates
24for taxable years beginning after December 31, 2016:
AB200,5,2525 (a) On all taxable income from $0 to $7,500, 4.0 percent.
AB200,6,2
1(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 5.84
2percent.
AB200,6,43 (c) On all taxable income exceeding $15,000 but not exceeding $225,000, 6.27
4percent.
AB200,6,65 (d) On all taxable income exceeding $225,000 but not exceeding $500,000, 7.65
6percent.
AB200,6,77 (e) On all taxable income exceeding $500,000, 8.25 percent.
AB200,5 8Section 5. 71.06 (2) (i) (intro.) of the statutes is amended to read:
AB200,6,109 71.06 (2) (i) (intro.) For joint returns, for taxable years beginning after
10December 31, 2012, and before January 1, 2017:
AB200,6 11Section 6. 71.06 (2) (j) (intro.) of the statutes is amended to read:
AB200,6,1312 71.06 (2) (j) (intro.) For married persons filing separately, for taxable years
13beginning after December 31, 2012, and before January 1, 2017:
AB200,7 14Section 7. 71.06 (2) (k) of the statutes is created to read:
AB200,6,1615 71.06 (2) (k) For joint returns, for taxable years beginning after
16December 31, 2016:
AB200,6,1717 1. On all taxable income from $0 to $10,000, 4.0 percent.
AB200,6,1918 2. On all taxable income exceeding $10,000 but not exceeding $20,000, 5.84
19percent.
AB200,6,2120 3. On all taxable income exceeding $20,000 but not exceeding $300,000, 6.27
21percent.
AB200,6,2322 4. On all taxable income exceeding $300,000 but not exceeding $1,000,000, 7.65
23percent.
AB200,6,2424 5. On all taxable income exceeding $1,000,000, 8.25 percent.
AB200,8 25Section 8. 71.06 (2) (L) of the statutes is created to read:
AB200,7,2
171.06 (2) (L) For married persons filing separately, for taxable years beginning
2after December 31, 2016:
AB200,7,33 1. On all taxable income from $0 to $5,000, 4.0 percent.
AB200,7,54 2. On all taxable income exceeding $5,000 but not exceeding $10,000, 5.84
5percent.
AB200,7,76 3. On all taxable income exceeding $10,000 but not exceeding $150,000, 6.27
7percent.
AB200,7,98 4. On all taxable income exceeding $150,000 but not exceeding $500,000, 7.65
9percent.
AB200,7,1010 5. On all taxable income exceeding $500,000, 8.25 percent.
AB200,9 11Section 9. 71.06 (2e) (a) of the statutes is amended to read:
AB200,8,712 71.06 (2e) (a) For taxable years beginning after December 31, 1998, and before
13January 1, 2000, the maximum dollar amount in each tax bracket, and the
14corresponding minimum dollar amount in the next bracket, under subs. (1m) and (2)
15(c) and (d), and for taxable years beginning after December 31, 1999, and before
16January 1, 2017,
the maximum dollar amount in each tax bracket, and the
17corresponding minimum dollar amount in the next bracket, under subs. (1n), (1p) (a)
18to (c), (1q) (a) and (b), and (2) (e), (f), (g) 1. to 3., (h) 1. to 3., (i) 1. and 2., and (j) 1. and
192., shall be increased each year by a percentage equal to the percentage change
20between the U.S. consumer price index for all urban consumers, U.S. city average,
21for the month of August of the previous year and the U.S. consumer price index for
22all urban consumers, U.S. city average, for the month of August 1997, as determined
23by the federal department of labor, except that for taxable years beginning after
24December 31, 2000, and before January 1, 2002, the dollar amount in the top bracket
25under subs. (1p) (c) and (d), (2) (g) 3. and 4. and (h) 3. and 4. shall be increased by a

1percentage equal to the percentage change between the U.S. consumer price index
2for all urban consumers, U.S. city average, for the month of August of the previous
3year and the U.S. consumer price index for all urban consumers, U.S. city average,
4for the month of August 1999, as determined by the federal department of labor,
5except that for taxable years beginning after December 31, 2011, the adjustment may
6occur only if the resulting amount is greater than the corresponding amount that was
7calculated for the previous year.
AB200,10 8Section 10. 71.06 (2e) (b) of the statutes is amended to read:
AB200,8,209 71.06 (2e) (b) For taxable years beginning after December 31, 2009, and before
10January 1, 2017,
the maximum dollar amount in each tax bracket, and the
11corresponding minimum dollar amount in the next bracket, under subs. (1p) (d), (1q)
12(c), and (2) (g) 4., (h) 4., (i) 3., and (j) 3., and the dollar amount in the top bracket under
13subs. (1p) (e), (1q) (d), and (2) (g) 5., (h) 5., (i) 4., and (j) 4., shall be increased each year
14by a percentage equal to the percentage change between the U.S. consumer price
15index for all urban consumers, U.S. city average, for the month of August of the
16previous year and the U.S. consumer price index for all urban consumers, U.S. city
17average, for the month of August 2008, as determined by the federal department of
18labor, except that for taxable years beginning after December 31, 2011, the
19adjustment may occur only if the resulting amount is greater than the corresponding
20amount that was calculated for the previous year.
AB200,11 21Section 11. 71.06 (2e) (bg) of the statutes is created to read:
AB200,9,522 71.06 (2e) (bg) For taxable years beginning after December 31, 2016, the dollar
23amount in each tax bracket under subs. (1r) and (2) (k) and (L) shall be increased each
24year by a percentage equal to the percentage change between the U.S. consumer
25price index for all urban consumers, U.S. city average, for the month of August of the

1previous year and the U.S. consumer price index for all urban consumers, U.S. city
2average, for the month of August 2013, as determined by the federal department of
3labor, except that for taxable years beginning after December 31, 2017, the
4adjustment may occur only if the resulting amount is greater than the corresponding
5amount that was calculated for the previous year.
AB200,12 6Section 12. 71.06 (2m) of the statutes is amended to read:
AB200,9,107 71.06 (2m) Rate changes. If a rate under sub. (1), (1m), (1n), (1p), (1q), (1r),
8or (2) changes during a taxable year, the taxpayer shall compute the tax for that
9taxable year by the methods applicable to the federal income tax under section 15 of
10the Internal Revenue Code.
AB200,13 11Section 13. 71.06 (2s) (d) of the statutes is amended to read:
AB200,9,2512 71.06 (2s) (d) For taxable years beginning after December 31, 2000, with
13respect to nonresident individuals, including individuals changing their domicile
14into or from this state, the tax brackets under subs. (1p), (1q), (1r), and (2) (g), (h),
15(i), and (j), (k), and (L) shall be multiplied by a fraction, the numerator of which is
16Wisconsin adjusted gross income and the denominator of which is federal adjusted
17gross income. In this paragraph, for married persons filing separately “ adjusted
18gross income" means the separate adjusted gross income of each spouse, and for
19married persons filing jointly “adjusted gross income" means the total adjusted gross
20income of both spouses. If an individual and that individual's spouse are not both
21domiciled in this state during the entire taxable year, the tax brackets under subs.
22(1p), (1q), (1r), and (2) (g), (h), (i), and (j), (k), and (L) on a joint return shall be
23multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted
24gross income and the denominator of which is their joint federal adjusted gross
25income.
AB200,14
1Section 14. 71.07 (5n) (e) of the statutes is created to read:
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