Example: A sharecropper resides on and operates a 120 acre dairy farm. The landlord and the sharecropper share equally the gross receipts from crop sales, $10,000, the gross milk receipts, $40,000, and the cost of seed and feed, $20,000. The landlord furnishes the land, buildings and machinery, for which annual allowable depreciation is $6,000. The landlord pays for the heat. In this situation, rent constituting property taxes accrued for the sharecropper equals 20% of the owner's share of the proceeds less the value of the nonoccupancy items furnished by the landlord, as follows:
Landlord's share of crop receipts
|
$5,000
|
|
Landlord's share of milk receipts
|
$20,000
|
$25,000
|
Less nonoccupancy items furnished by landlord:
Landlord's share of seed and feed
Depreciation of buildings not including the dwelling, and machinery
|
$10,000
$ 6,000
|
$16,000
|
Gross rent
|
|
$ 9,000
x 20%
|
Rent constituting taxes accrued
|
|
$1,800
|
(13)(title) LOW INCOME LOW-INCOME HOUSING.
SECTION 31. Tax 14.05(13)(a)(intro.) and (b) are renumbered Tax 14.05(13)(b) and (c) and as renumbered Tax 14.05(13)(b) is amended to read:
Tax 14.05(13)(b) If a A landlord receives may receive both payments from a claimant and subsidy payments from a governmental agency and applies them toward rental of a homestead, and if the application of the for rental of the claimant's homestead. If the allocation of the subsidy payments to food, medical services, and or other personal services as described in sub. (2)(a) s. 71.52(2), Stats., furnished by the landlord is not specified under the terms of an agreement with the paying
governmental agency, the portion of the rent paid for occupancy eligible for the homestead credit may be computed as follows:
shall be the total rent paid for occupancy multiplied by a fraction, the numerator of which is the amount paid by the claimant and the denominator of which is the total amount paid including governmental subsidies.
Note to Revisor: Replace the example at the end of sub. (13)(a) before renumbering with the following example at the end of sub. (13)(b) as renumbered:
Example: A total of $5,400 is paid to a claimant's landlord for the year on behalf of the claimant, $1,800 by the claimant and $3,600 by a governmental agency. The value of food provided is $600 and no services are provided.
Qualifying rent paid for occupancy is $1,600, computed as follows: $4,800 x [$1,800 ÷ $5,400]. The $4,800 is the total amount paid, $5,400, less the $600 for food. The $1,800 is the amount the claimant paid and the $5,400 is the total amount paid.
SECTION 32. Tax 14.05(13)(a)1., 2. and 3. are repealed.
SECTION 33. Tax 14.05(13)(a) is created to read:
Tax 14.05(13)(a) Indirect payments of rent, such as a subsidy payment from a governmental agency for low-income housing, are not includable in determining gross rent.
SECTION 34. Tax 14.05(14)(a)1. and 2. are amended to read:
Tax 14.05(14)(a)1. A standard rate of $40
$100 per week but not more than the actual rent paid.
2. The percentage of building occupancy expenses method as computed in the example at the end of this subsection. Under this method, the ratio that a nursing home's or a long-term care facility's building occupancy expenses for a year bears to gross income received in that year, both directly from residents and indirectly from governmental aid, is determined. This ratio is applied to a resident's total direct payments for a year for which a homestead credit claim is filed, yielding the portion of the payments constituting rent paid for occupancy. This ratio shall be determined from the most recent income and expense data available at the time a rent certificate is prepared, preferably using data from the same year for which the homestead credit is claimed. The building occupancy expenses claimed shall be limited to the expenses attributable to real estate and furnishings only, such as property taxes, interest, lease or rent expenses, depreciation, upkeep and repairs and utilities.
Note to Revisor: Insert the following example at the end of sub. (14)(a)2.:
Example: The following format may be used to compute a resident's rent paid for occupancy; the worksheet is filled in as an example of how to compute the percentage:
1. Building occupancy expenses - real estate and furnishings only:
a. Property taxes $ 30,000
b. Interest 70,000
c. Lease or rent expenses 10,000
d. Depreciation 60,000
e. Upkeep and repairs 10,000
f. Utilities 20,000
g. Total building occupancy expenses $ 200,000
2. Gross income, including indirect payments $1,600,000
3. Line 1.g divided by line 2 equals the percentage rate 12.5%
The percentage rate determined above is to be multiplied by the total rent collected as entered on the rent certificate prepared for a resident filing a homestead credit claim, and the amount so determined is to be entered on the rent certificate as rent paid for occupancy. Assuming a resident's total direct payments for the year were $36,000, rent paid for occupancy would be $4,500, which is 12.5% of $36,000.
SECTION 35. Tax 14.05(14)(b) is renumbered Tax 14.05(14)(b)1.
SECTION 36. Tax 14.05(14)(b)2. is created to read:
Tax 14.05(14)(b)2. A person living in a nursing home who received medical assistance under s. 49.45, Stats., during the year to which the claim relates but is not receiving the medical assistance at the time of filing a homestead credit claim may claim the homestead credit if otherwise eligible. In this situation, amounts paid by medical assistance are not includable in determining rent paid for occupancy.
Note to Revisor: 1) Remove the example at the end of sub. (14)(c).
2) Remove the “1)" from the first note at the end of Tax 14.05.
3) Remove notes 2 and 3 at the end of Tax 14.05.
4) Insert the following 4 notes at the end of Tax 14.05:
Note: Section Tax 14.05 interprets ss. 71.52(2) and (8), 71.53(2)(e) and (f), 71.54(2)(a) and (c) and 71.55(2) and (8), Stats.
Note: Section 71.54(2)(a)(intro.), Stats., was amended by 1995 Wis. Act 27, effective July 28, 1995, to reference “relief from any county under s. 59.07(154)," Stats. (s. 59.07(154), Stats., was renumbered s. 59.53(21), Stats., by 1995 Wis. Act 201, effective September 1, 1996). Section 71.54(2)(a)(intro.), Stats., was again amended, by 1995 Wis. Act 289, effective July 1, 1996, to provide for a one-twelfth reduction of rent constituting property taxes accrued for months a claimant received Wisconsin works under s. 49.147(4) or (5), Stats. Prior to the enactment of 1995 Wis. Acts 27 and 289, the county relief reference was to “general relief from any municipality or county," and there was no reference to Wisconsin works because that program did not exist.
Note: Section 71.54(2)(a)(intro.), Stats., was amended by 1999 Wis. Act 9, effective for 2000 homestead credit claims filed in calendar year 2001 and thereafter, to require a one-twelfth reduction of rent constituting property taxes accrued for months a claimant received Wisconsin works payments as a caretaker of a newborn child under s. 49.148(1m), Stats. Under the statutes in effect immediately prior to the enactment of 1999 Wis. Act 9, the reduction was not required for receipt of those payments.
Note: The standard rate of $100 per week for rent paid for occupancy by residents of nursing homes or long-term care facilities became effective with rent paid for calendar year 2000. For rent paid for calendar years 1999 and prior, the standard rate was $40 per week.
SECTION 37. Tax 14.06(title), (1) and (3)(c)(intro.) are amended to read:
Tax 14.06(title) Marriage, separation, or divorce during a claim year.
(1) PURPOSE. This section describes the qualifications for a homestead credit and the computation of household income, property taxes accrued, and rent constituting property taxes accrued of a claimant who becomes married or divorced during the year to which a homestead credit claim relates or whose spouse occupies a separate dwelling for any part of a claim year.
Note to Revisor: Replace the example at the end of sub. (2)(c) with the following:
Example: X marries Y on September 1, and they decide that X is to be the claimant. Prior to the marriage, X pays gross rent of $250 per month and Y pays gross rent of $350 per month. They pay gross rent of $500 per month for their jointly occupied apartment after the marriage. Heat is not included at any of the dwellings. X's income is $4,000 prior to the marriage, and X's services and property generate marital property income of $2,000 after the marriage. Y's income is $10,000 prior to the marriage, and Y's services and property generate marital property income of $5,000 after the marriage. There are no dependents.
In this situation, household income reportable by X is $11,000, consisting of X's $4,000 of income prior to the marriage plus the $7,000 income of both X and Y after the marriage. Rent constituting property taxes accrued which may be claimed by X is $1,000, which is 25% of the sum of X's rent of $250 per month for 8 months, or $2,000, and 4 months rent at $500 per month after the marriage, or $2,000, totaling $4,000 for the year. Since Y is not the claimant, Y's rent of $350 per month and income of $10,000 for the 8 months prior to the marriage are not considered in computing the homestead credit.
(3)(c)(intro.) In the event a husband and wife occupy separate dwellings or become divorced during a claim year, household income is determined under s. 71.52(5), Stats., under Wisconsin income tax law, and under marital property law as provided in ch. 766, Stats., except that marital property law does not apply if one of the spouses is not domiciled in Wisconsin during the period of time they occupy separate dwellings. Household income shall be determined as follows:
Note to Revisor: 1) Remove the “1)" from the first note at the end of Tax 14.06.
2) Replace note 2 at the end of Tax 14.06 with the following:
Note: Throughout s. Tax 14.06, it has been assumed that a dissolved marriage was dissolved by a decree of divorce. Under s. 766.01(7), Stats., the dissolution of a marriage may also be by annulment or decree of invalidity, or by entry of a decree of legal separation or separate maintenance. The computation of household income, property taxes accrued and rent constituting property taxes accrued is the same under any of these types of dissolutions.
3) Remove note 3 at the end of Tax 14.06.
4) Insert the following note at the end of Tax 14.06:
Note: Section Tax 14.06 interprets ss. 71.52(5), (7) and (8) and 71.53(1)(c), Stats.
Initial Regulatory Flexibility Analysis
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Fiscal Estimate
The proposed rule order would increase the “standard rate" used to determine rent paid by nursing home residents for purposes of the Homestead credit from $40 per week to $100 per week. The effect of this change would be to increase, for any nursing home resident using the standard rate in the Homestead calculation, the credit received by $499. It is not known how many nursing home residents claim the Homestead credit, nor how many of them use the standard rate, instead of some other means of determining rent, in the Homestead calculation. Therefore, the fiscal effect of this rule change is not known. However, Homestead is limited to low-income persons and the credit is not allowed to nursing home residents who receive Medicaid; these restrictions make it unlikely that the number of persons affected by this rule change is more than 1,000. Thus, it is believed this rule will increase Homestead expenditures by less than $500,000.
Other changes in this proposed rule would update language and provisions relating to public assistance, gains from the sale of homes and the imposition of interest; would reflect proper filing and adjustment procedures, and deadlines; and would conform style and language to Legislative Council Rules Clearinghouse standards. These other changes have no fiscal effect.
Notice of Hearing
Workforce Development
Notice is hereby given that pursuant to ss. 103.66 and 104.04, Stats., the Department of Workforce Development proposes to hold a public hearing to consider the repeal and recreation of s. DWD 272.085 and the creation of s. DWD 270.085, relating to student worklike activities that do not constitute employment.
Hearing Information
March 30, 2000 Room 400X, GEF #1 Bldg.
Thursday 201 East Washington Ave.
10:00 a.m. MADISON, WI
Interested persons are invited to appear at the hearing and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.
An accessible entrance to the building is available via a ramp from the corner of Washington Avenue and Webster Street to the Butler Street entrance. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audiotape format will be made available on request to the fullest extent possible.
Analysis Prepared by the Dept. of Workforce Development
Statutory authority: ss. 103.66 and 104.04, Stats.
Statutes interpreted: ss. 103.66 and 104.04, Stats.
The state's administrative rules on child labor currently do not contain specific provisions on the status of students who perform services such as helping in the lunchroom or cafeteria or performing minor clerical work in the school office or library. The field operations handbook of the Wage and Hour Division of the U.S. Department of Labor provides that student activities of this type should not be treated as employment under the wage and hour laws as long as certain conditions are met. This rule adopts a policy similar to the federal standards.
The proposed rule allows a student to help in the school lunchroom, clean a classroom, act as a hall monitor, or perform minor clerical work in the school office or library for periods of one hour per day or less. Other student worklike activities are permissible and not sufficient to constitute employment if they have an educational benefit for the student, do not add more than one hour to the school day, and do not displace a regular employe. Student worklike activities that meet these criteria are not subject to the minimum wage requirements.
Text of Rule
SECTION 1. DWD 270.085 is created to read:
DWD 270.085 Student worklike activities. (1) SPECIFIC ALLOWABLE ACTIVITIES. It is permissible under this chapter and not sufficient to constitute employment regardless of whether compensation is received when a student performs worklike activities in his or her own elementary or secondary school under the following conditions:
(a) The student helps in the school lunchroom or cafeteria, cleans a classroom, acts as a hall monitor, or performs minor clerical work in the school office or library.
(b) The student performs the activities in par. (a) for periods of an hour per day or less on days school is in session or for longer time periods on days that school is not in session so that the annual total time spent on the activities listed in par. (a) is no more than the equivalent of one hour per school day.
(2) CONDITIONS FOR OTHER STUDENT WORKLIKE ACTIVITIES. Student worklike activities in an elementary or secondary school other than those listed in sub. (1) are permissible under this chapter and will not be considered sufficient to constitute employment under the following conditions:
(a) The activity is basically educational, is conducted primarily for the benefit of the student, and comprises one of the facets of the educational opportunities offered to the student. The nonemployment status is not changed if the student also receives payment in order to have a more realistic worklike situation or as an incentive to the student.
(b) The time in attendance at school plus the time spent at the activity does not exceed the time that the student would be required to attend school under a normal academic schedule by more than one hour per day.
(c) The student does not displace a regular employe or reduce previously existing employment opportunities by performing work that would otherwise be performed by regular employes.
SECTION 2. DWD 272.085 is repealed and recreated to read:
DWD 272.085 Student activities and employment. (1) INDEPENDENT COLLEGES AND UNIVERSITIES. (a) Independent colleges and universities may employ full-time students who are 18 years of age and over for 20 hours per week or less at the established federal Fair Labor Standards Act rates.
(b) Students who work at independent colleges or universities for over 20 hours per week shall be paid at the rates established under s. DWD 272.03.
(2) ELEMENTARY AND SECONDARY SCHOOLS. Student activities that meet the criteria of s. DWD 272.085 are not covered by the minimum wage provisions of this chapter.
Initial Regulatory Flexibility Analysis
The proposed rule does not affect small business.
Fiscal Estimate
