2009 Wisconsin Act 28

28,1783 Section 1783. 71.775 (4) (bm) 2. of the statutes is created to read:

71.775 (4) (bm) 2. For taxable years beginning after December 31, 2008, for persons who qualify for a federal extension of time to file under 26 USC 7508A due to a presidentially declared disaster or terroristic or military action, withholding taxes that are otherwise due from a pass-through entity under sub. (2) are not subject to 12 percent interest as otherwise provided under subd. 1. during the extension period and for 30 days after the end of the federal extension period.

28,1784 Section 1784. 71.775 (4) (bn) of the statutes is created to read:

71.775 (4) (bn) If a pass-through entity subject to withholding tax under sub. (2) does not file the return under par. (a) on or before the extension date provided in par. (bm), the pass-through entity is liable for the penalty provided in s. 71.83 (1), in addition to any unpaid tax, interest, and penalty otherwise assessable to a nonresident partner, member, shareholder, or beneficiary on income from the pass-through entity.

28,1785 Section 1785. 71.775 (4) (c) of the statutes is renumbered 71.775 (4) (i).

28,1786 Section 1786. 71.775 (4) (cm) of the statutes is created to read:

71.775 (4) (cm) Except as provided in par. (L), pass-through entities shall make estimated payments of the withholding tax under sub. (2) in 4 installments, on or before the 15th day of each of the following months:

1. The 3rd month of the taxable year.

2. The 6th month of the taxable year.

3. The 9th month of the taxable year.

4. The 12th month of the taxable year.

28,1787 Section 1787. 71.775 (4) (d) of the statutes is renumbered 71.775 (4) (j) and amended to read:

71.775 (4) (j) A nonresident partner, member, shareholder, or beneficiary of a pass-through entity may claim a credit, as prescribed by the department, on his or her Wisconsin income or franchise tax return for the amount withheld under sub. (2) on his or her behalf for the tax period for which the income of the pass-through entity is reported. For purposes of determining whether interest under s. 71.84 applies to a nonresident partner, member, shareholder, or beneficiary, the amount withheld under sub. (2) is considered to be paid in 4 equal quarterly installments.

28,1788 Section 1788. 71.775 (4) (dm) of the statutes is created to read:

71.775 (4) (dm) Section 71.29 (3), (3m), (4), (5), (6), and (11), as it applies to estimated payments of income and franchise taxes for corporations, also applies to estimated payments of the withholding tax imposed under sub. (2) for pass-through entities.

28,1789 Section 1789. 71.775 (4) (e) of the statutes is renumbered 71.775 (4) (k).

28,1790 Section 1790. 71.775 (4) (em) of the statutes is created to read:

71.775 (4) (em) Except as provided in par. (fm), in the case of any underpayment of estimated withholding taxes under par. (cm), interest shall be added to the aggregate withholding tax for the taxable year at the rate of 12 percent per year on the amount of the underpayment for the period of the underpayment. In this paragraph, "period of the underpayment" means the time period beginning with the due date of the installment and ending on either the unextended due date of the return under par. (a) or the date of payment, whichever is earlier. If 90 percent of the tax due under sub. (2) for the taxable year is not paid by the unextended due date of the return under par. (a), the difference between that amount and the estimated taxes paid, along with any interest due, shall accrue delinquent interest in the same manner as income and franchise taxes under s. 71.82 (2) (a).

28,1791 Section 1791. 71.775 (4) (f) of the statutes is repealed.

28,1792 Section 1792. 71.775 (4) (fm) of the statutes is created to read:

71.775 (4) (fm) No interest is required under par. (em) for a pass-through entity if any of the following conditions apply:

1. The amount of withholding tax due under sub. (2) is less than $500.

2. The amount of withholding tax due under sub. (2) is less than $5,000, the pass-through entity had no withholding tax liability under sub. (2) for the preceding taxable year, and the preceding taxable year was 12 months.

28,1793 Section 1793. 71.775 (4) (g) of the statutes is created to read:

71.775 (4) (g) Except as provided under par. (h), the amount of each installment required under par. (cm) is 25 percent of the lesser of the following amounts:

1. Ninety percent of the withholding tax under sub. (2) that is due for the taxable year.

2. The withholding tax due under sub. (2) for the preceding taxable year, except that this subdivision does not apply if the preceding taxable year was less than 12 months or if the pass-through entity did not file a return under par. (a) for the preceding taxable year.

28,1794 Section 1794. 71.775 (4) (h) of the statutes is created to read:

71.775 (4) (h) If 22.5 percent for the first installment, 45 percent for the 2nd installment, 67.5 percent for the 3rd installment, and 90 percent for the 4th installment of the tax due under sub. (2) for the taxable year; computed by annualizing, under methods prescribed by the department, the pass-through entity's income for the months in the taxable year ending before the installment's due date; is less than the installment required under par. (g), the pass-through entity may pay the amount under this paragraph, rather than the amount under par. (g). For purposes of computing annualized income under this paragraph, the apportionment percentage computed under s. 71.25 (6), (10), and (12) from the return under par. (a) filed for the previous taxable year may be used if that return was filed with the department on or before the due date of the installment for which the income is being annualized and if the apportionment percentage on that previous year's return was greater than zero. Any pass-through entity that pays an amount calculated under this paragraph shall increase the next installment computed under par. (g) by an amount equal to the difference between the amount paid under this paragraph and the amount that would have been paid under par. (g).

28,1795 Section 1795. 71.775 (4) (L) of the statutes is created to read:

71.775 (4) (L) The department shall deem timely paid the estimated payments of the withholding tax imposed under sub. (2) that become due during the period beginning on January 1, 2009, and ending on the effective date of this paragraph .... [LRB inserts date], provided that such estimated tax payments are paid by the next installment due date that follows in sequence following the effective date of this paragraph .... [LRB inserts date]. However, if the next installment due date following the effective date of this paragraph .... [LRB inserts date], is less than 45 days after the effective date of this paragraph .... [LRB inserts date], such estimated payments, in addition to the payment due less than 45 days after the effective date of this paragraph .... [LRB inserts date], shall be deemed timely paid if paid by the next subsequent installment due date.

28,1796 Section 1796. 71.80 (9m) of the statutes is created to read:

71.80 (9m) Failure to produce records. A person who fails to produce records or documents, as provided under ss. 71.74 (2) and 73.03 (9), that support amounts or other information required to be shown on any return required under this chapter may be subject to any of the following penalties, as determined by the department, except that the department may not impose a penalty under this subsection if the person shows that under all facts and circumstances the person's response, or failure to respond, to the department's request was reasonable or justified by factors beyond the person's control:

(a) The disallowance of deductions, credits, exemptions, or income inclusions to which the requested records relate.

(b) In addition to any penalty imposed under sub. (4), a penalty for each violation of this subsection that is equal to the greater of $500 or 25 percent of the amount of the additional tax on any adjustment made by the department that results from the person's failure to produce the records.

(c) The department shall promulgate rules to administer this subsection and the rules shall include a standard response time, a standard for noncompliance, and penalty waiver provisions.

28,1797 Section 1797. 71.80 (20) of the statutes is repealed and recreated to read:

71.80 (20) Electronic filing. If a person is required to file 50 or more wage statements or 50 or more of any one type of information return with the department, the person shall file the statements or the returns electronically, by means prescribed by the department.

28,1798 Section 1798. 71.80 (24) of the statutes is created to read:

71.80 (24) Throwback transition. For persons subject to tax under this chapter whose sales factor includes sales under s. 71.04 (7) (a) or 71.25 (9) (a), (df) 3., or (dh) 4., the department shall deem timely paid the estimated tax payments attributable to the difference between the person's tax liability for the taxable year and the person's tax liability for the taxable year computed under ch. 71, 2007 stats., for installments that become due during the period beginning on January 1, 2009, and ending on the effective date of this subsection .... [LRB inserts date], provided that such estimated tax payments are paid by the next installment due date that follows in sequence following the effective date of this subsection .... [LRB inserts date]. However, if the next installment due date that follows in sequence following the effective date of this subsection .... [LRB inserts date], is less than 45 days after the effective date of this subsection .... [LRB inserts date], such estimated tax payments, in addition to the payment due less than 45 days after the effective date of this subsection .... [LRB inserts date], shall be deemed timely paid if paid by the next subsequent installment due date.

28,1801 Section 1801. 71.83 (1) (a) 10. of the statutes is created to read:

71.83 (1) (a) 10. `Failure to provide schedules.' If a person who is required to provide a schedule under s. 71.13 (1m), 71.20 (1m), or 71.36 (4) fails to provide the schedule by the due date, including any extension, or provides an incorrect or incomplete schedule, the person is subject to a $50 penalty for each violation, except that the department shall waive the penalty if the person shows the department that a violation resulted from a reasonable cause and not from willful neglect.

28,1802 Section 1802. 71.83 (3) of the statutes is renumbered 71.83 (3) (a) and amended to read:

71.83 (3) (a) If any person required under this chapter to file an income or franchise tax return fails to file a return within the time prescribed by law, or as extended under s. 71.03 (7), 71.24 (7) or 71.44 (3), unless the return is filed under such an extension but the person fails to file a copy of the extension that is granted by or requested of the internal revenue service, the department shall add to the tax of the person $30 in the case of corporations and in the case of persons other than corporations $2 when the total normal income tax of the person is less than $10, $3 when the tax is $10 or more but less than $20, $5 when the tax is $20 or more, except that $30 shall be added to the tax if the return is 60 or more days late $50 to the person's tax if the return is filed under subch. I of this chapter or $150 to the person's tax if the return is filed under subch. IV or VII of this chapter. If no tax is assessed against any such person the amount of this fee shall be collected as income or franchise taxes are collected. If any person who is required under s. 71.65 (3) to file a withholding report and deposit withheld taxes fails timely to do so; unless the person so required dies or the failure is due to a reasonable cause and not due to neglect; the department of revenue shall add $30 $50 to the amount due except that if the person is subject to taxation under subch. IV or VII of this chapter the department shall add $150 to the amount due.

28,1803 Section 1803. 71.83 (3) (b) of the statutes is created to read:

71.83 (3) (b) A partnership that fails to file a statement under s. 71.20 (1) by the due date, including any extension, is subject to a $50 fee.

28,1804 Section 1804. 71.91 (8) of the statutes is created to read:

71.91 (8) Financial record matching program. (a) Definitions. In this subsection:

1. "Account" means a demand deposit account, checking account, negotiable withdrawal order account, savings account, time deposit account, or money market mutual fund account.

2. "Department" means the department of revenue.

3. "Financial institution" has the meaning given in s. 49.853 (1) (c).

4. "Ownership interest" has the meaning specified by the department by rule.

5. "Person" includes any individual, firm, partnership, limited liability company, joint venture, joint stock company, association, public or private corporation, estate, trust, receiver, personal representative, and other fiduciary, and the owner of a single-owner entity that is disregarded as a separate entity under this chapter.

(b) Matching program agreements. The department shall promulgate rules specifying procedures under which the department shall enter into agreements with financial institutions doing business in this state to operate the financial record matching program under this subsection. The information required under par. (c) shall be provided by electronic data exchange in the manner specified by the department by rule or by agreement between the department and the financial institution. If the financial institution requests reimbursement, the department shall reimburse a financial institution for costs associated with participating in the financial record matching program under this subsection in an amount not to exceed $125 for each calendar quarter that the institution participates in the program.

(c) Financial institution matching. The department shall provide to the financial institution, with which it has an agreement under par. (b) at least quarterly, the names and social security numbers or federal employer identification numbers of delinquent debtors. The financial institution shall match this information against all accounts maintained at the financial institution. The financial institution shall notify the department of the name, social security or federal employer identification number, address, account number, account type, and account balance of any person with ownership interest in any account that matches any name or number provided by the department. The notice shall be provided in a manner specified by the department by rule or by agreement between the department and the financial institution.

(e) Confidentiality. A financial institution participating in the financial institution matching program under this subsection and the employees, agents, officers, and directors of the financial institution, may use any information provided by the department only for the purpose of administering this subsection and shall be subject to the confidentiality provisions of ss. 71.78 (1) and 77.61 (5) (a). Any person violating this paragraph may be fined not less than $25 nor more than $500, or imprisoned in the county jail for not less than 10 days nor more than one year or both.

(f) Financial institution liability. A financial institution that provides information under par. (c) is not liable to any person for disclosing information to the department under this subsection or for any other action that the financial institution takes in good faith to comply with this subsection.

(g) Penalty. A financial institution that fails to provide any information required under par. (c) within 120 days from either the date that the information is due or from the date that the department requests the information may be subject to a $100 penalty for each occurrence of the financial institution's failure to provide account information about an account holder. The department may commence civil proceedings to enforce this subsection if a financial institution fails to provide any information required under par. (c) after 120 days from either the date that the information is due or from the date that the department requests the information.

(h) Exceptions. This subsection does not apply to a financial institution that has assets of less than $5,000,000.

28,1805 Section 1805. 71.93 (1) (a) 8. of the statutes is created to read:

71.93 (1) (a) 8. Any amount owed to a state agency and collected pursuant to a written agreement between the department of revenue and the state agency as provided under sub. (8) (b), if the debt has been reduced to a judgment or if the state agency or the department has provided the debtor reasonable notice and an opportunity to be heard with regard to the amount owed.

28,1806 Section 1806. 71.93 (3) (a) of the statutes is amended to read:

71.93 (3) (a) In administering this section the department shall first check with the state agency certifying the debt to determine whether the debt has been collected by other means. If the debt remains uncollected the The department of revenue shall setoff any debt or other amount owed to the department, regardless of the origin of the debt or of the amount, its nature or its date. If after the setoff there remains a refund in excess of $10, the department shall set off the remaining refund against certified debts of other state agencies. If more than one certified debt exists for any debtor, the refund shall be first set off against the earliest debt certified, except that no child support or spousal support obligation submitted by an agency of another state may be set off until all debts owed to and certified by state agencies of this state have been set off. When all debts have been satisfied, any remaining refund shall be refunded to the debtor by the department. Any legal action contesting a setoff under this paragraph shall be brought against the state agency that certified the debt under sub. (2).

28,1807 Section 1807. 71.93 (8) of the statutes is renumbered 71.93 (8) (a).

28,1808 Section 1808. 71.93 (8) (b) of the statutes is created to read:

71.93 (8) (b) 1. Except as provided in subd. 2., a state agency and the department of revenue shall enter into a written agreement to have the department collect any amount owed to the state agency that is more than 90 days past due, unless negotiations between the agency and debtor are actively ongoing, the debt is the subject of legal action or administrative proceedings, or the agency determines that the debtor is adhering to an acceptable payment arrangement. At least 30 days before the department pursues the collection of any debt referred by a state agency, either the department or the agency shall provide the debtor with a written notice that the debt will be referred to the department for collection. The department may collect amounts owed, pursuant to the written agreement, from the debtor in addition to offsetting the amounts as provided under sub. (3). The department shall charge each debtor whose debt is subject to collection under this paragraph an amount for administrative expenses and that amount shall be credited to the appropriation under s. 20.566 (1) (h).

2. The department may enter into agreements described under subd. 1. with the courts, the legislature, authorities, as defined in s. 16.41 (4), and local units of government.

3. Agreements required under subd. 1. shall be completed no later than July 1, 2010, except that an agreement may allow a delay or phase-in of referrals.

4. The secretary of revenue may waive the referral of certain types of debt. The department's determination that a debt is not collectable does not prevent the referring agency from taking additional collection actions.

5. The department may collect debts and assess interest on delinquent amounts under this paragraph in the same manner that it collects taxes and assesses interest under ss. 71.82 (2), 71.91, 71.92, and 73.03 (20). The department's use of tax returns and related information to collect debts under this paragraph is not a violation of s. 71.78, 72.06, 77.61 (5), 78.80 (3), or 139.38 (6).

6. If the debtor owes debt to the department and to other entities, payments shall first apply to debts owed to the department, then to the state agencies, the courts, the legislature, and authorities, as defined in s. 16.41 (4), in the order in which the debts were referred to the department, and then to local units of government in the order in which the debts were referred to the department.

28,1811 Section 1811. 73.03 (52) of the statutes is renumbered 73.03 (52) (a).

28,1812 Section 1812. 73.03 (52) (b) of the statutes is created to read:

73.03 (52) (b) To enter into agreements with the federal department of the treasury that provide for offsetting state payments against federal nontax obligations; and to charge a fee up to $25 per transaction for such offsets; and offsetting federal payments, as authorized by federal law, against state tax and nontax obligations, and collecting the offset cost from the debtor, if the agreements provide that setoffs under par. (a) and ss. 71.93 and 71.935 occur before the setoffs under this paragraph. The agreement shall provide that the federal department of the treasury may deduct a fee from each administrative offset and state payment offset. For purposes of this paragraph "administrative offset" is any offset of federal payments to collect state debts and "state payment offset" is any offset of state payments to collect federal nontax debts.

28,1814 Section 1814. 73.03 (64) of the statutes is created to read:

73.03 (64) To post on the Internet a list of every person who has had a seller's permit revoked under s. 77.52 (11). The Internet site shall list the real name, business name, address, revocation date, type of tax due, and amount due, including interests, penalties, fees, and costs, for each person who has had a seller's permit revoked under s. 77.52 (11). The department shall update the Internet site periodically to add revoked permits and to remove permits that are no longer revoked or for which the permit holder has made sufficient arrangements with the department so that the permit holder may be issued a monthly seller's permit. The department shall update the Internet site quarterly to remove revoked permits for entities that have been out of business for at least one year.

28,1815 Section 1815. 73.03 (65) of the statutes is created to read:

73.03 (65) (a) To enter into agreements with federally recognized American Indian tribes or bands in this state to collect, remit, and provide refunds of the following taxes for activities that occur on tribal lands or are undertaken by tribal members outside of tribal lands:

1. Income taxes imposed under subch. I of ch. 71.

2. Withholding taxes imposed under subch. X of ch. 71.

3. Sales and use taxes under subch. III of ch. 77.

4. Motor vehicle fuel taxes imposed under subch. I of ch. 78.

5. Beverage taxes imposed under subch. I of ch. 139.

(b) For purposes of this subsection, all tax and financial information disclosed during negotiations, or exchanged pursuant to a final agreement, between the department and a federally recognized American Indian tribe or band in this state is subject to the confidentiality provisions under ss. 71.78 and 77.61 (5).

(c) The department shall submit a copy of each agreement negotiated under this subsection to the joint committee on finance no later than 30 days after the agreement is signed by the department and the tribe or band.

28,1815b Section 1815b. 73.03 (66) of the statutes is created to read:

73.03 (66) To promulgate rules to ensure that the payments under s. 79.10 (4) made from the appropriation account under s. 20.835 (3) (qb) are used exclusively for school levy tax credits granted to state residents.

28,1815d Section 1815d. 73.03 (67) of the statutes is created to read:

73.03 (67) To submit a request for a supplement under s. 16.515 for administering the debt collection program under s. 71.93 (8) (b) that includes a detailed plan for implementing the program, a listing of agencies and other entities that would participate in the program, an estimate of the amount of debt collections under the program, and the fees that the debtors would pay under the program.