Plain language analysis
This proposed rule does the following:
• Provides definitions related to the lottery and gaming credit and establishes procedures to assist in the management of the lottery and gaming credit program at the state, county, town, village, and city level.
• Provides restrictions for the distribution of the school levy tax credit - lottery fund.
• Removes obsolete provisions relating to plat review fees.
Summary of related federal requirements
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with similar rules in adjacent states
The department is not aware of a similar rule in an adjacent state.
Summary of factual data and analytical methodologies
The department issues hundreds of millions of dollars in school levy tax and lottery and gaming credits each year, including hundreds of thousands of dollars in lottery and gaming late claim credits. The documentation required to issue and audit these distributions must be uniform, accurate, and complete to ensure the department has the information necessary to successfully manage these credit programs. This rule order has also been created to provide further guidance to municipalities and counties to ensure qualifying properties within their districts are receiving the credits available to them.
Analysis and supporting documents used to determine effect on small business or in preparation of an economic impact report
The provisions of the proposed rule order concerning the school levy tax credit are as required under s.
73.03 (66), Stats. The rule itself does not impose any significant financial or other compliance burden on small business.
The provisions of the proposed rule order concerning the lottery and gaming credit affect individuals applying for and receiving the credit, and counties and municipalities that manage the lottery and gaming credit program. There is not an effect on small business.
Effect on Small Business
This proposed rule does not have a significant effect on small business.
Initial regulatory flexibility analysis
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Fiscal Estimate
Assumptions used in arriving at fiscal estimate
The proposed rule modifies two chapters of the Department of Revenue's Administrative Code.
The repeal and recreation of Tax 20 of the Administrative Code is intended to accomplish the following: (a) add language required under sec. 73.03 (66) specifying that the portion of the school levies credit for each municipality that is funded from the lottery fund shall not exceed the school levies credit amount paid to state residents, (b) eliminate outdated references to "precertification" and "interim" years with regard to lottery and gaming credit; and (c) reorganize and clarify other points concerning the distribution of the lottery and gaming credit. These changes have no fiscal effect on the state or on local governments.
The repeal of Tax 53 regarding plat review fees has no fiscal effect on the state or on local governments. These fees were once administered by the Department of Revenue, but are now administered by the Division of Intergovernmental Relations in the Department of Administration.
State fiscal effect
No state fiscal effect.
Local fiscal effect
No local government costs.
Anticipated costs incurred by the private sector
This proposed rule does not have a significant fiscal effect on the private sector.
Agency Contact Person
Please contact Dale Kleven at (608) 266-8253 or
dale.kleven@revenue.wi.gov, if you have any questions regarding this proposed rule.
Text of Rule
SECTION 1. Chapter Tax 20 is repealed and recreated to read:
PROPERTY TAX CREDITS
Subchapter I – School Levy Tax Credit, Lottery Fund
Tax 20.01 Purpose. The purpose of this subchapter is to, as required under s.
73.03 (66), Stats., provide restrictions for the distribution of the school levy tax credit, lottery fund, under s.
79.10 (4), Stats.
Tax 20.02 Definitions. In this subchapter:
(1) “
Department" means the department of revenue.
(2) “Domicile" has the meaning given in s.
71.01 (1n), Stats.
(3) “Municipality" means a town, village, or city.
(4) “Resident individual" means either of the following:
(a) A natural person whose domicile is in this state.
(b) A natural person who lives in this state for more than six months of the year.
Tax 20.03 Distribution of credit. A payment to a municipality under s.
79.10 (4), Stats., made from the appropriation under s.
20.835 (3) (qb), Stats., may not, as determined by the department, exceed the amount of the school levy credit paid to resident individuals in that municipality.
Subchapter II – Lottery and Gaming Credit
Tax 20.04 Purpose. The purpose of this subchapter is to provide definitions related to the lottery and gaming credit and establish procedures to assist in the management of the lottery and gaming credit program at the state, county, town, village, and city level.
Note: Department of Revenue forms mentioned throughout this subchapter are located on the department's web site at
www.revenue.wi.gov.
Tax 20.05 Definitions. In this subchapter:
(1) “Application" means the form used to claim the lottery and gaming credit.
(2) “Approved property" means taxable real estate or an item of personal property that contains the primary residence of an owner whose application for a lottery and gaming credit has been timely filed under s.
Tax 20.07 or
20.11, and has not been disqualified by the department.
(3) “Certification date" means January 1 of the year the tax is levied. For manufactured and mobile homes placed in a manufactured or mobile home community after January 1, the certification date is determined under s.
66.0435 (3) (c) 2., Stats.
(5) “Department" means the department of revenue.
(6) “Dwelling" means a structure or that part of a multidwelling or multipurpose structure occupied as separate living quarters. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have direct access from outside the building or through a common hall. “Dwelling" does not include a structure which is exempt from property taxes under s.
70.111 (19) or
70.112 (5), Stats., in the year of the credit.
(8) “Maximum credit value" or “MCV" means the value of property calculated by the department as provided in s.
79.10 (11) (c), Stats., for purposes of computing the lottery and gaming credit.
(10) “Monthly municipal permit fee" means the fee calculated under s.
66.0435 (3) (c), Stats., collected by the local taxing authority or community operator, as defined in s.
66.0435 (1) (c), Stats., from each occupied space or lot in a manufactured or mobile home community located in the licensing authority's boundaries.
(11) “Municipality" means any town, village or city.
(12) “Owner" means:
(a) A person named as an owner on the title instrument for that person's primary residence which is recorded in the records of the register of deeds for the county in which that person's primary residence is located.
(b) A person related as husband or wife to a person under par. (a), (d), (f), (g), or (h).
(c) A partner of a partnership under s.
178.03 (1), Stats., or shareholder of a tax-option corporation as defined in s.
71.34 (2), Stats., or a shareholder of a small business corporation as defined in s. 1361 (b) of the Internal Revenue Code, if that partnership or corporation owns property that is the primary residence of the partner or shareholder.
(d) A buyer in possession under a land contract of property which is the primary residence of the buyer, provided that the land contract or the instrument evidencing the existence of a land contract is notarized no later than 6 months after the certification date.
(e) A trustee, as defined in s.
701.01 (8), Stats., of a trust in property, as defined in s.
701.01 (7), Stats., where a beneficiary of that trust, as defined in s.
701.01 (1), Stats., uses the property as his or her primary residence.
(f) A member, as defined in s.
185.01 (5), Stats., of a cooperation as defined in s.
185.01 (2), Stats., that owns property that is the primary residence of the member.
(g) A person holding a property interest for life under s.
700.02 (3), Stats., in property on which that person's primary residence is located, provided that the life interest is notarized no later than 6 months after the certification date.
(h) An owner of a manufactured or mobile home.
(i) A lawfully authorized agent of an owner described under pars. (a) to (h) acting on behalf of that owner.
(13) “Primary residence" means the dwelling where an individual lives most of the time and to which, when temporarily away, the individual returns, except that no individual may have more than one primary residence at any time. “Primary residence" includes a dwelling located in this state lived in by an individual for more than 6 months during a year in which the individual lived only part of the year in this state.
Note: Eligibility for the lottery credit will not be denied to an owner who is a temporary resident of a facility such as a health care facility if it is the intent of the owner to return to his or her primary residence.
(14) “School tax rate" means the rate computed by the department as the total amount levied by the school district in which the property is located divided by the full value of the school district excluding tax incremental district value increments.
(15) “Taxation district" has the meaning given in s.
74.01 (6), Stats.
(16) “Taxing jurisdiction" has the meaning given in s.
74.01 (7), Stats.
Tax 20.06 Computing the lottery and gaming credit. (1) For owners of taxable property, the credit is computed as the estimated fair market value, not to exceed the maximum credit value, of the approved property multiplied by the school tax rate for the school district in which the approved property is located.
(2) For owners of manufactured and mobile homes subject to a monthly municipal permit fee, the credit is computed as the fair market value minus the tax exempt household furnishings of the manufactured or mobile home, as established by the assessor under s.
66.0435 (3) (c), Stats., for January 1, not to exceed the maximum credit value, multiplied by the school tax rate for the school district in which the manufactured or mobile home is located.
(3) The amount of property tax or monthly municipal permit fee due after subtracting the lottery and gaming credit may not be less than zero.
Tax 20.07 How to claim the credit. (1)
Taxable Property. (a) An owner of taxable property who qualifies for the lottery and gaming credit may claim the credit on an application form prescribed by the department. The application form shall require the claimant to attest to, as of the certification date, owning the property described on the application form and using it as a primary residence. The completed application form shall be filed with the county treasurer except that in a city that collects taxes under s.
74.87, Stats., the application form shall be filed with the city treasurer. A claim made under this paragraph is valid until no longer eligible, at which time the claim shall be withdrawn by the claimant as required under sub. (3), except as provided under s.
Tax 20.12 (2).
Note: The various application forms used to claim the lottery and gaming credit are available on the department's web site at
www.revenue.wi.gov.
(b) If more than one owner qualifies for and claims a credit on taxable property, each owner shall claim the credit under par. (a) on a separate application form. The number of credits claimed on a property may not exceed the number of dwellings on the property. Total credits for each dwelling are limited by s.
Tax 20.06 (3).
Note: Examples of owners whose primary residence is on the same property as another owner include co-owners of agricultural land on which each owner has a primary residence or co-owners of a duplex in which each dwelling is occupied by one of the owners.
(c) An owner who qualifies for the credit against taxes but whose tax bill does not reflect the credit may claim the credit until January 31 following the issuance of the tax bill by filing the application form under par. (a) with the treasurer collecting the taxes. If the application form is approved, the treasurer shall proceed under s.
Tax 20.08 (1) (e). Requests made after January 31 shall be filed with the department no later than October 1 following the issuance of the person's property tax bill, on the appropriate late claim application form, for processing under s.
Tax 20.11 (2). The department will notify the applicable treasurer of those late claims approved by the department. The treasurer shall then enter the property on the next tax role as property that qualifies for a lottery and gaming credit. The owner should also file an application under par. (a), with the applicable treasurer, to apply for the credit for subsequent years. A claim made under this paragraph is valid until no longer eligible, at which time the claim shall be withdrawn by the claimant as required under sub. (3), except as provided under s.
Tax 20.12 (2).
(d) 1. If a property transferred qualifies for the credit because a previous owner used the property as his or her primary residence on the certification date, the new owner of the property may apply for the credit on a form prescribed by the department, or by indicating on the real estate transfer return that the property will be used by the owner as their primary residence. Requests made under this paragraph shall be filed with the treasurer of the county in which the property is located or, if the property is located in a city that collects taxes under s.
74.87, Stats., with the treasurer of that city.
2. A claim made under par. (a) is valid until no longer eligible, at which time the claim shall be withdrawn by the claimant, except as provided under s.
Tax 20.12 (2). If the claimant under this paragraph does not own or use the property as his or her primary residence on the certification date of any year subsequent to the year of the claim, the claimant shall withdraw the claim as required under sub. (3).
(e) Requests made after January 31 of the year following the year of the credit shall be filed with the department no later than October 1 following the issuance of the person's property tax bill for processing under s.
Tax 20.11 (2) on the appropriate late claim application form. The submission of a late claim application form with the department does not certify the owner for future credits. The department will notify the applicable treasurer of those late claims approved by the department. The treasurer shall then enter the property on the next tax role as property that qualifies for a lottery and gaming credit. The owner shall also file an application under par. (a) with the applicable treasurer to apply for the credit for subsequent years. A claim made under this paragraph is valid until no longer eligible, at which time the claim shall be withdrawn by the claimant as required under sub. (3), except as provided under s.
Tax 20.12 (2).
(2)
Manufactured and Mobile Homes. (a) The owner of a manufactured or mobile home, subject to a monthly municipal permit fee, who qualifies for the credit as of January 1, may claim the credit on an application form prescribed by the department. The application form shall require the claimant to attest to, as of the certification date, owning the manufactured or mobile home described on the application and using it as a primary residence. The completed application form must be filed with the taxation district treasurer no later than February 10 of the year the owner is eligible for the credit. A claim made under this paragraph is valid until no longer eligible, at which time the claim shall be withdrawn by the claimant as required under sub. (3), except as provided under s.
Tax 20.12 (2).
(b) The taxation district treasurer shall compute the amount of the lottery and gaming credit under s.
Tax 20.06 (2). One-twelfth of the credit computed under this paragraph shall be subtracted from each monthly municipal permit fee otherwise due for the parking site occupied by the owner under par. (a) on January 1.
(c) The amount of the lottery and gaming credit received for months in which a fee is not due for the parking site of an owner under par. (a) shall be recorded by the taxation district treasurer and returned to the department by January 20 of the following year. The taxation district treasurer may charge back to the school district the corresponding credits previously settled for under s.
Tax 20.10.
(3)
Withdrawing A Claim. Within 30 days of the date on which the claimant no longer owns the taxable real or personal property or the manufactured or mobile home subject to a monthly municipal permit fee on which a claim was based, or no longer uses the property as a primary residence, the claimant shall inform the treasurer administering the credit under this section that the claimant is no longer eligible to claim a credit for the property. Failure to do so may subject the owner to penalties under s.
Tax 20.12 (2).
