Statutory authority
Explanation of agency authority
Section
227.11 (2) (a), Stats., provides “[e]ach agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute..."
In addition, under s.
71.80 (1) (c), Stats., the department may make such regulations as it shall deem necessary in order to carry out ch.
71, Stats., relating to income and franchise taxes. This authority pertains to all of the proposed changes in this rule, except those concerning ch.
Tax 11.
Related statute or rule
There are no other applicable statutes or rules.
Plain language analysis
The proposed rule makes the following changes:
• Amends s. Tax 1.11 (4) (d) to reflect the Lottery Board no longer exists and the lottery is instead a division of the department.
• Amends s.
Tax 2.085 (1),
(2), and
(3) to reflect a change in the process used to claim a refund on behalf of a deceased taxpayer.
• Adds a note to s.
Tax 2.50 (1) explaining that a public utility that is a corporation may be in a combined group.
• Repeals s.
Tax 2.90 (6) to reflect retirement pay or pension are not part of the statutory definition of “wages" for withholding purposes.
• Repeals s.
Tax 2.97, which is out-of-date and thus obsolete.
• Amends s.
Tax 2.98 (1) (b) to update a reference to the Internal Revenue Code.
• Revises s.
Tax 2.98 (Note 2) to remove out-of-date statutory references and otherwise provide clarity.
Summary of, and comparison with, existing or proposed federal regulation
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by the rule.
Comparison with rules in adjacent states
The department is not aware of a similar rule in an adjacent state.
Summary of factual data and analytical methodologies
2012 Executive Order 61 and
2011 Wisconsin Act 46 requires state agencies to work with the Small Business Regulatory Review Committee to review the agency's administrative rules that may be particularly onerous to small businesses in Wisconsin. In response, the department initiated a comprehensive review of all of its administrative rules. The changes described above were identified as part of that review. No other data was used in the preparation of this rule order or this analysis.
Analysis and supporting documents used to determine effect on small business
This rule order makes changes to reflect current law and current department policy. It makes no policy or other changes having an effect on small business.
Anticipated costs incurred by private sector
This rule order does not have a fiscal effect on the private sector.
Effect on Small Business and Initial Regulatory Flexibility Analysis
This rule order does not affect small business.
Agency Contact Person
Text of Rule
SECTION 1. Tax 1.11 (4) (d) is amended to read:
Tax 1.11 (4) (d) Lottery board division. The executive director administrator of the lottery board may request examination of tax returns for the purpose of withholding delinquent Wisconsin taxes, child support, and other debts owing this state.
SECTION 2. Tax 2.085 (1), (2), and (3) are amended to read:
Tax 2.085 (1) If a refund of Wisconsin income taxes is due a deceased taxpayer and if the refund exceeds $100
claimant is unable to cash the refund check, the claimant shall file, with the income tax return, a completed form I-804
804, entitled "Claim for Decedent's Wisconsin Income Tax Refund".
(2) Form I-804 does not have to be filed if the
If a refund is claimed on a joint Wisconsin income tax return of the surviving spouse and the decedent. The, the surviving spouse shall write "filing as surviving spouse" in the signature area of the return. If someone other than the surviving spouse is the personal representative, the personal representative shall also sign the joint return.
(3) Forms required to be filed under sub. (1) shall be mailed to the Wisconsin Department of Revenue, Tax Operations Bureau – Mail Stop 3-164, P.O. Box 59
8903, Madison, WI 53785 53708-8903.
SECTION 3. Tax 2.50 (1) (Note) is created to read:
Tax 2.50 (1) (Note) A public utility that is a corporation may be in a combined group for taxable years beginning on or after January 1, 2009. See s.
Tax 2.61 (2) for a description of corporations required to use combined reporting.
SECTION 4. Tax 2.90 (6) is repealed.
SECTION 5. Tax 2.97 is repealed.
SECTION 6. Tax 2.98 (1) (b) and (Note 2) are amended to read:
Tax 2.98 (1) (b) If a taxpayer sustains a casualty loss from a disaster in an area subsequently determined by the president of the United States to warrant federal assistance, section 165 (h) (i) of the Internal Revenue Code gives taxpayers the election to deduct the loss on the return for the current tax year or on the return for the immediately preceding tax year.
(Note 2)
Section 71.02 (2) (d), 1983 Stats., which defines "Wisconsin taxable income," was renumbered 71.02 (2) (me), 1985 Stats., and amended by 1985 Wis. Act 29, The treatment described in this section became effective with 1986 individual income tax returns filed in taxable year 1987.
This amendment is reflected in s. Tax 2.98. Section 71.02 (2) (me), 1985 Stats., was again renumbered, s. 71.01 (16), Stats., by
1987 Wis. Act 312. For 1985 and prior year income tax returns filed in 1986 and prior taxable years, disaster area losses from damage to property used for personal purposes were also allowed, as an itemized deduction
, using the provisions in sub. (1) (b) and the individual treatment in sub. (2) (b).
SECTION 7. Tax 11.04 (1) is amended to read:
Tax 11.04 (1)
Definition. In this rule, "exempt entity" means a person qualifying for an exemption under s.
77.54 (9a) or
77.55 (1), Stats. Section
77.54 (9a), Stats., provides an exemption for sales to this state or any agency thereof, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority,
the Wisconsin Economic Development Corporation, the Health Insurance Risk-Sharing Plan Authority, and the Fox River Navigational System Authority; any county, city, village, town or school district in this state; a county-city hospital established under s.
66.0927, Stats.; a sewerage commission organized under s.
281.43 (4), Stats., or a metropolitan sewerage district organized under ss.
200.01 to
200.15 or
200.21 to
200.65, Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s.
66.0823, Stats.; any corporation, community chest fund, foundation or association organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s.
613.80 (2), Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member or corporation; a local exposition district under subch.
II of ch. 229, Stats.; a local cultural arts district under subch.
V of ch. 229, Stats.; a cemetery company or corporation described under section
501 (c)
13 of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation for the purposes of the company or corporation. Section
77.55 (1), Stats., provides an exemption for sales to the United States, its unincorporated agencies and instrumentalities, and any unincorporated [incorporated] agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States.
SECTION 8. Tax 11.05 (4) (a) is amended to read:
Tax 11.05 (4) (a) Section
77.54 (9a), Stats., exempts sales to and the storage, use or other consumption of tangible personal property and items and property under s.
77.52 (1) (b) and
(c), Stats., and services by Wisconsin or by any agency of Wisconsin, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority,
the Wisconsin Economic Development Corporation, the Health Insurance Risk-Sharing Plan Authority, and the Fox River Navigational System Authority; any county, city, village, town or school district in this state; a county-city hospital established under s.
66.0927, Stats.; a sewerage commission organized under s.
281.43 (4), Stats., or a metropolitan sewerage district organized under ss.
200.01 to
200.15 or
200.21 to
200.65, Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s.
66.0823, Stats.; any corporation, community chest fund, foundation or association organized and operated exclusively for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s.
613.80 (2), Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member or corporation; a local exposition district under subch.
II of ch. 229, Stats.; a local cultural arts district under subch.
V of ch. 229, Stats.; and a cemetery company or corporation described under section
501 (c) (13) of the Internal Revenue Code, if the tangible personal property or taxable services are used exclusively by the cemetery company or corporation for the purposes of the company or corporation.
SECTION 9. Tax 11.49 (2) (b) is amended to read:
Tax 11.49 (2) (b) Sales made directly to this state or any agency thereof, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority,
the Wisconsin Economic Development Corporation, the Health Insurance Risk-Sharing Plan Authority, and the Fox River Navigational System Authority; any county, city, village, town, or school district in this state; a county-city hospital established under s.
66.0927, Stats.; a sewerage commission organized under s.
281.43 (4), Stats., or a metropolitan sewerage district organized under ss.
200.01 to
200.15 or
200.21 to
200.65, Stats.; any other unit of government in this state or any agency or instrumentality of one or more units of government in this state; any federally recognized American Indian tribe or band in this state; any joint local water authority created under s.
66.0823, Stats.; any corporation, community chest fund, foundation, or association organized and operated exclusively for religious, charitable, scientific, or educational purposes, or for the prevention of cruelty to children or animals, except hospital service insurance corporations under s.
613.80 (2), Stats., no part of the net income of which inures to the benefit of any private stockholder, shareholder, member, or corporation; a local exposition district under subch.
II of ch. 229, Stats.; a local cultural arts district under subch.
V of ch. 229, Stats. Sales to a cemetery company or corporation described under section
501 (c) (13) of the Internal Revenue Code, are exempt from sales and use tax if the cemetery company or corporation uses the items exclusively for the purposes of the company or corporation. Section
77.55 (1), Stats., provides an exemption for sales to the United States, its unincorporated agencies and instrumentalities, and any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States. Sales to employees of these entities are not exempt, even though the entity may reimburse the employee for the expenditure.
SECTION 10. Tax 11.70 (2) (e) is amended to read:
Tax 11.70 (2) (e) Producing, fabricating, processing, printing, or imprinting tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., for clients for a consideration, even though the client may furnish the materials used in producing, fabricating, processing, printing, or imprinting
of the property, items, or goods. However, the tax does not apply to the printing or imprinting of tangible personal property or items, property, or goods under s.
77.52 (1) (b),
(c), or
(d), Stats., that results in printed material, catalogs, or envelopes that are exempt under s.
77.54 (25) or
(25m), Stats.
SECTION 11. Effective date. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s.
227.22 (2) (intro.), Stats.
ADMINISTRATIVE RULES
FISCAL ESTIMATE
AND ECONOMIC IMPACT ANALYSIS
|
Type of Estimate and Analysis
|
X Original ⍽ Updated ⍽ Corrected
|
Administrative Rule Chapter, Title and Number
|
Chapters Tax 1, 2, and 11 – General administration; income taxation, returns, records and gross income; and sales and use tax.
|
Subject
|
General provisions of income taxation and sales and use tax
|
Fund Sources Affected
|
Chapter 20 , Stats. Appropriations Affected
|
⍽ GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S
|
|
Fiscal Effect of Implementing the Rule
|
X No Fiscal Effect
⍽ Indeterminate
|
⍽ Increase Existing Revenues
⍽ Decrease Existing Revenues
|
⍽ Increase Costs
⍽ Could Absorb Within Agency's Budget
⍽ Decrease Costs
|
The Rule Will Impact the Following (Check All That Apply)
|
⍽ State's Economy
⍽ Local Government Units
|
⍽ Specific Businesses/Sectors
⍽ Public Utility Rate Payers
|
Would Implementation and Compliance Costs Be Greater Than $20 million?
⍽ Yes X No
|
Policy Problem Addressed by the Rule
|
The rule does not create or revise policy, other than to reflect current law and department policy.
|
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
As indicated in the attached fiscal estimate, since the fiscal impact of any applicable statutory changes has already been reflected in general fund condition statements, the proposed rule has no fiscal effect.
No comments concerning the economic effect of the rule were submitted in response to the department's solicitation.
|
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
|
Clarifications and guidance provided by administrative rules may lower the compliance costs for businesses, local governmental units, and individuals.
If the rule is not implemented, Chapters Tax 1, 2, and 11 will be incomplete in that they will not reflect current law or department policy.
|
Long Range Implications of Implementing the Rule
|
No long-range implications are anticipated.
|
Compare With Approaches Being Used by Federal Government
|
N/A
|
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
|
N/A
|
FISCAL ESTIMATE FORM
|
|
2011 Session
|
X ORIGINAL
⍽ UPDATED
|
LRB #
|
|
|
INTRODUCTION #
|
|
⍽ CORRECTED
⍽ SUPPLEMENTAL
|
Admin rule #
|
Chapters Tax 1, 2, 11: Various provisions SS 074-12
|
Subject
Proposed order of the Department of Revenue relating to general provisions of income taxation and sales and use tax.
|
|
Fiscal Effect
|
State: X No State Fiscal Effect
Check columns below only if bill makes a direct appropriation or
affects a sum sufficient appropriation
⍽ Increase Existing Appropriation ⍽ Increase Existing Revenues
⍽ Decrease Existing Appropriation ⍽ Decrease Existing Revenues
⍽ Create New Appropriation
|
Increase Costs - May be Possible to Absorb Within Agency's Budget ⍽ Yes ⍽ No
⍽ Decrease Costs
|
Local: X No Local Government Costs
|
1. ⍽ Increase Costs
|
3 ⍽ Increase Revenues
|
5. Types of Local Governmental Units Affected:
|
⍽ Permissive
⍽ Mandatory
|
⍽ Permissive ⍽ Mandatory
|
⍽ Towns ⍽ Villages
⍽ Cities
|
2. ⍽ Decrease Costs
|
4. Decrease Revenues
|
⍽ Counties ⍽ Others
|
|
⍽ Permissive
⍽ Mandatory
|
⍽ Permissive ⍽ Mandatory
|
⍽ School Districts ⍽ WTCS Districts
|
Fund Sources Affected
⍽ GPR
⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S
|
Affected Ch. 20 Appropriations
|
Assumptions Used in Arriving at Fiscal Estimate:
The proposed rule updates Chapter TAX 1, 2 and 11 of the Administrative Code. The proposed rule modifies the administrative code to reflect law changes, improve clarity, and update references.
The proposed rule includes:
• Changes to reflect the replacement of the Lottery Board with the Lottery Division within the Department of Revenue.
• A note explaining that public utilities may be in a combined group for taxable years beginning on or after January 1, 2009 for combined reporting purposes.
• Changes to update the procedure by which individuals may claim individual income tax refunds due to a decedent.
• Changes to reflect that pension and retirement pay are not part of the statutory definition of “wages" for withholding purposes.
• Changes to reflect the sales and use tax exemption for purchases made by the Wisconsin Economic Development Corporation created under 2011 Wisconsin Act 7.
Since the fiscal impact of any applicable statutory changes has already been reflected in general fund condition statements, the proposed rule has no fiscal effect.
|
Notice of Hearing
Revenue
NOTICE IS HEREBY GIVEN That, pursuant to s.
125.03, Stats., the Department of Revenue will hold a public hearing to consider permanent rules revising Chapters
Tax 4,
8, and
9 relating to general provisions of excise taxation and enforcement.
Hearing Dates and Locations
The hearing will be held:
Date: Monday, April 1, 2013
Time: 1:00 p.m.
Location: Events Room
State Revenue Building
2135 Rimrock Road
Madison, WI 53713
Handicap access is available at the hearing location.
Appearances at the Hearing and Submittal of Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person listed below or to adminrules.wisconsin.gov no later than April 1, 2013, and will be given the same consideration as testimony presented at the hearing.
Dale Kleven
Department of Revenue
Mail Stop 6-40, 2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
Telephone: (608) 266-8253
Analysis by the Department of Revenue
Statute interpreted
Statutory authority
Explanation of agency authority
Section
125.03, Stats., provides “[t]he department, in furtherance of effective control, may promulgate rules consistent with this chapter and ch.
139."
Related statute or rule
There are no other applicable statutes or rules.
Plain language analysis
The proposed rule makes the following changes:
• Updates notes and examples throughout Chapter
Tax 4 to provide current rates of tax and department contact information.
• Repeals s.
Tax 8.11 concerning the submission of paper reports, as all reports are electronically filed.
• Updates notes throughout Chapter
Tax 8 to provide current contact information for the department.
• Amends s.
Tax 9.19 to reflect that, due to advances in technology, machines other than fuson machines may be used to affix cigarette stamps.
• Amends s.
Tax 9.21 (3) to be consistent with s.
139.34 (3), Stats., which prohibits out-of-state distributers from shipping unstamped cigarettes to other distributers.
